Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/237580 
Year of Publication: 
2021
Series/Report no.: 
UCD Centre for Economic Research Working Paper Series No. WP21/02
Publisher: 
University College Dublin, UCD Centre for Economic Research, Dublin
Abstract: 
We investigate the firm level investment responses to narrative shocks to average personal and corporate tax rates using a universal micro dataset of publicly traded U.S firms for the post- 1962 period. By allowing for heterogeneous effects over the business cycle and accompanying monetary policy regime, as well as over firm-level characteristics, we show that : (i) corporate tax multipliers are negative overall, but this result is driven by smaller firms who face larger borrowing constraints, especially during high-unemployment periods or when the accompanying monetary policy is contractionary; (ii) while the magnitude and the significance of personal income tax multipliers are smaller on the aggregate, there is some evidence of positive personal tax multipliers in high-unemployment state by large (dividend-paying) firms, which is consistent with the recent literature.
Subjects: 
Investment
taxation
fiscal policy
fiscal multiplier
JEL: 
C33
C53
E62
G32
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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