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Output Effects of a Measure of Tax Shocks Based on Changes in Legislation for Portugal

Author

Listed:
  • Manuel Coutinho Pereira

    () (Banco de Portugal)

  • Lara Wemans

    () (Banco de Portugal)

Abstract

This paper develops a new measure of quarterly discretionary tax shocks for Portugal resulting from changes in legislation, following the narrative approach. A comprehensive analysis of tax policy mea-sures in the period 1996-2012 was undertaken. The findings point to strongly negative and persistent effects of legislated tax increases on GDP and private consumption, matching the tendency of the narrative approach to yield comparatively high tax multipliers.

Suggested Citation

  • Manuel Coutinho Pereira & Lara Wemans, 2015. "Output Effects of a Measure of Tax Shocks Based on Changes in Legislation for Portugal," Hacienda Pública Española, IEF, vol. 215(4), pages 27-62, December.
  • Handle: RePEc:hpe:journl:y:2015:v:215:i:4:p:27-62
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    References listed on IDEAS

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    1. Tullio Jappelli & Luigi Pistaferri, 2010. "The Consumption Response to Income Changes," Annual Review of Economics, Annual Reviews, vol. 2(1), pages 479-506, September.
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    6. Gabriela Lopes de Castro, 2006. "Consumption, Disposable Income and Liquidity Constraints," Economic Bulletin and Financial Stability Report Articles, Banco de Portugal, Economics and Research Department.
    7. Karel Mertens & Morten Overgaard Ravn, 2011. "Understanding the Aggregate Effects of Anticipated and Unanticipated Tax Policy Shocks," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 14(1), pages 27-54, January.
    8. Christina D. Romer & David H. Romer, 2010. "The Macroeconomic Effects of Tax Changes: Estimates Based on a New Measure of Fiscal Shocks," American Economic Review, American Economic Association, vol. 100(3), pages 763-801, June.
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    10. Manuel Coutinho Pereira & Lara Wemans, 2015. "Output Effects of a Measure of Tax Shocks Based on Changes in Legislation for Portugal," Hacienda Pública Española, IEF, vol. 215(4), pages 27-62, December.
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    Cited by:

    1. Manuel Coutinho Pereira & Lara Wemans, 2015. "Output Effects of a Measure of Tax Shocks Based on Changes in Legislation for Portugal," Hacienda Pública Española, IEF, vol. 215(4), pages 27-62, December.
    2. Manuel Coutinho Pereira & Lara Wemans, 2013. "The macroeconomic effects of legislated tax changes in Portugal," Economic Bulletin and Financial Stability Report Articles, Banco de Portugal, Economics and Research Department.

    More about this item

    Keywords

    fiscal policy; tax shocks; macroeconomic stabilization.;

    JEL classification:

    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles

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