Sunday, June 16, 2013

Tax Cuts, Economic Growth, and the UK

New paper (CES via ASI):

The resulting tax changes are shown to be unforecastable on the basis of past macroeconomic data. I find that a 1 per cent cut in taxes stimulates GDP by 0.6 per cent on impact and by 2.5 per cent over three years. These findings are remarkably similar to the corresponding estimates for the United States.

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