Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/80350
Authors: 
Reicher, Christopher Phillip
Year of Publication: 
2013
Series/Report no.: 
Kiel Working Paper 1850
Abstract: 
This paper provides a set of detailed estimated fiscal reaction functions for a panel of twenty industrialized countries, and it discusses commonalities and differences with regard to systematic fiscal policies across countries. In general, the countries in the panel adjust tax revenues strongly in response to the public debt, and they adjust tax revenues and transfer payments, but, interestingly, not tax rates, strongly in response to output fluctuations. Some countries such as Germany appear to adjust government consumption and investment relatively strongly in response to the public debt, while the United States adjusts capital tax rates relatively strongly. In general, an increased emphasis in the theoretical literature on the effects of procyclical tax revenues and countercyclical transfer payments as automatic stabilizers may be warranted.
Subjects: 
fiscal policy
fiscal rule
deficits
taxes
government purchases
transfer payments
JEL: 
E62
E63
H20
H62
Document Type: 
Working Paper

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