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Preannounced tax cuts and their potential influence on the 2001 recession

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Author Info
R. Andrew Butters
Marcelo Veracierto

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Abstract

The authors present a model in which anticipated future tax cuts, like those promised during the 2000 U.S. presidential campaign, generate a contraction in economic activity with some of the atypical features observed during the 2001 recession (such as its relatively strong consumption and home investment).

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Article provided by Federal Reserve Bank of Chicago in its journal Economic Perspectives.

Volume (Year): (2009)
Issue (Month): Q III ()
Pages: 44-60
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Handle: RePEc:fip:fedhep:y:2009:i:qiii:p:44-60:n:v.33no.3

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  1. Franck Portier & Paul Beaudry, 2004. "When Can Changes in Expectations Cause Business Cycle Fluctuations?," 2004 Meeting Papers 865, Society for Economic Dynamics. [Downloadable!]
  2. Yongsung Chang & Sun-Bin Kim, 2006. "From Individual To Aggregate Labor Supply: A Quantitative Analysis Based On A Heterogeneous Agent Macroeconomy ," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 47(1), pages 1-27, 02. [Downloadable!] (restricted)
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  3. Christopher L. House & Matthew D. Shapiro, 2006. "Phased-In Tax Cuts and Economic Activity," American Economic Review, American Economic Association, vol. 96(5), pages 1835-1849, December. [Downloadable!]
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This page was last updated on 2009-12-15.

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