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Tax Policy and Business Fixed Investment in the United States Author info | Abstract | Publisher info | Download info | Related research | Statistics Alan J. Auerbach
Kevin Hassett
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This paper derives and estimates models of nonresidential investment behavior in which current and future tax conditions directly affect the incentive to invest. The estimates suggest that taxes have played an independent role in affecting postwar U.S. investment behavior, particularly for investment in machinery and equipment. In addition, the paper develops a method for assessing the impact of tax policy on the volatility of investment when such policy is endogenous. Illustrative calculations using this technique, based on the paper's empirical estimates, suggest that tax policy has not served to stabilize investment in equipment or nonresidential structures during the sample period.
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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number
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Date of creation: Jun 1992Date of revision:
Publication status: published as Journal of Public Economics, Vol.44, pp. 141-170, (1992).Handle: RePEc:nbr:nberwo:3619Note: PEContact details of provider: Postal: National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A. Phone: 617-868-3900 Email: Web page: http://www.nber.org More information through EDIRC
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