The Economic Recovery Act of 1981 led to the largest postwar decline in effective tax rates on capital. The legislation also had its most significant effect on rates in 1982 due to the rapid decline in inflation. Although some of the tax cut was rescinded in 1982, effective corporate tax rates on plant and equipment, measured as the difference between before and after-tax rates on return to capital as a percentage of before-tax rates of return, remained at historically low values though 1986. Accompanying this tax cut is the current economic recovery which began in November, 1982. It is therefore, natural to investigate the linkages between the tax cut and the increase in economic activity.
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Paper provided by Federal Reserve Bank of Richmond in its series Working Paper with number
87-04.
References listed on IDEAS Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
Brock, William A., 1980.
"Asset Prices in a Production Economy,"
Working Papers
275, California Institute of Technology, Division of the Humanities and Social Sciences.
[Downloadable!]
Other versions:
William A. Brock, 1982.
"Asset Prices in a Production Economy,"
NBER Chapters,
in: The Economics of Information and Uncertainty, pages 1-46
National Bureau of Economic Research, Inc.
[Downloadable!]