This paper estimates the GDP impact of legislated tax changes in Spain using a newly constructed narrative record for the period 1986–2015. Our baseline estimates suggest that a 1% of GDP increase in exogenous taxes depresses output by around 1.3% after 1 year, this negative effect fading away at more distant horizons. We also find that the effects of changes in indirect taxes are larger and that, following a tax increase, investment reacts more than consumption. Overall, our set of estimates is consistent with negative output effects triggered by tax increases, yet the quantitative effects are subject to non-negligible uncertainty that is reflected in wide confidence bands, in line with the extant literature for other countries.
CITATION STYLE
Gil, P., Martí, F., Morris, R., Pérez, J. J., & Ramos, R. (2019). The output effects of tax changes: narrative evidence from Spain. SERIEs, 10(1), 1–23. https://doi.org/10.1007/s13209-018-0173-5
Mendeley helps you to discover research relevant for your work.