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Tax Policy and Investment

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  • Kevin A. Hassett
  • R. Glenn Hubbard

Abstract

In this paper, we summarize recent advances in the study of effects of tax policy on the fixed investment decisions of firms. We attempt to identify consensus where it has been achieved and to highlight important unresolved issues. In addition, we discuss the implications of recent findings for the analysis of policy options, and discuss arguments for and against long-run tax policy that favors business investment spending.

Suggested Citation

  • Kevin A. Hassett & R. Glenn Hubbard, 1996. "Tax Policy and Investment," NBER Working Papers 5683, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:5683
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    References listed on IDEAS

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    1. Auerbach, Alan J. & Hassett, Kevin, 1992. "Tax policy and business fixed investment in the United States," Journal of Public Economics, Elsevier, vol. 47(2), pages 141-170, March.
    2. Barnett, Steven A. & Sakellaris, Plutarchos, 1998. "Nonlinear response of firm investment to Q:: Testing a model of convex and non-convex adjustment costs1," Journal of Monetary Economics, Elsevier, vol. 42(2), pages 261-288, July.
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    JEL classification:

    • H3 - Public Economics - - Fiscal Policies and Behavior of Economic Agents

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