Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/174985
Authors: 
D'Acunto, Francesco
Hoang, Daniel
Weber, Michael
Year of Publication: 
2018
Series/Report no.: 
CESifo Working Paper 6862
Abstract: 
Unconventional fiscal policy uses announcements of future increases in consumption taxes to generate inflation expectations and accelerate consumption expenditure. It is budget neutral and time consistent. We provide preliminary evidence for the effectiveness of such policies using changes in value-added tax (VAT) and household survey data for Poland. We find households increased their inflation expectations and willingness to purchase durables before the increase in VAT. Future research has to ensure income, wealth effects, or intratemporal substitution channels cannot explain these results and ideally exploit exogenous variation in VAT in a fixed nominal interest rate environment.
JEL: 
D12
D84
D91
E21
E31
E32
E52
E65
Document Type: 
Working Paper

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