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Working paper
Racial Dynamics in the U.S.: Evidence from the Stock Market
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Does Size Matter? The Real Effects of Subsidizing Small Firms
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Working paper
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Disclosure in Democracy
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Political Influence and the Renegotiation of Government Contracts
In: Review of Financial Studies, Forthcoming
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Deficits, Public Debt Dynamics and Tax and Spending Multipliers
In: The economic journal: the journal of the Royal Economic Society, Band 123, Heft 566, S. F133-F163
ISSN: 1468-0297
Deficits, public debt dynamics, and tax and spending multipliers
Cutting government spending on goods and services increases the budget defi cit if the nominal interest rate is close to zero. This is the message of a simple but standard New Keynesian DSGE model calibrated with Bayesian methods. The cut in spending reduces output and thus - holding rates for labor and sales taxes constant - reduces revenues by even more than what is saved by the spending cut. Similarly, increasing sales taxes can increase the budget defi cit rather than reduce it. Both results suggest limitations of austerity measures in low interest rate economies to cut budget deficits. Running budget deficits can by itself be either expansionary or contractionary for output, depending on how deficits interact with expectations about the long run in the model. If deficits trigger expectations of i) lower long-run government spending, ii) higher long-run sales taxes, or iii) higher future infl ation, they are expansionary. If deficits trigger expectations of higher long-run labor taxes or lower long-run productivity, they are contractionary.
BASE
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Working paper
Investor Tax Credits and Entrepreneurship: Evidence from U.S. States
In: NYU Stern School of Business
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Working paper
Investor Tax Credits and Entrepreneurship: Evidence from U.S. States
In: NBER Working Paper No. w27751
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Working paper