Photo from wikipedia
Abstract We investigate whether the effect of tax news depends on the state of the economy. Using U.S. quarterly data, we show that news about future tax cuts are more… Click to show full abstract
Abstract We investigate whether the effect of tax news depends on the state of the economy. Using U.S. quarterly data, we show that news about future tax cuts are more contractionary during recessions. This nonlinearity is mainly due to the response of durable consumption and, especially, nonresidential investment.