Cyclically Adjusted Budget Balances: An Alternative Approach

Bouthevillain, Carine; Cour-Thimann, Philippine; Dool, Gerrit van den; Cos, Pablo Hernández de; Langenus, Geert; Mohr, Matthias; Momigliano, Sandro; Tujula, Mika

doi:10.2139/ssrn.356222

Cited by 64 publications

(30 citation statements)

References 8 publications

(11 reference statements)

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“…In addition, adjustment speed to the LR equilibrium for Germany and the UK is low. In this regard, our results for Germany are in line with the findings of Koester and Priesmeier (2012), Mourre and Princen (2019), Bouthevillain et al (2001), and Boschi and d'Addona (2019).…”

Section: Base-to-gdp Elasticitiessupporting

confidence: 91%

Estimating policy-corrected long-term and short-term tax elasticities for the USA, Germany, and the United Kingdom

2022

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We estimate the elasticities of the most important tax categories using a new quarterly database of discretionary tax measures for the USA, Germany, and the United Kingdom over the period 1980Q1 to 2018Q2. Employing Romer and Romer’s (2009) narrative approach, we construct a policy-neutral dataset based on revenue figures from governmental records. Using this quantitative information, we are able to subtract policy-induced changes, which often are not considered in the literature. Furthermore, we estimate state-dependent elasticities. Our conclusions are as follows. (i) In Germany and the UK, long-term tax-to-base elasticities are generally higher than short-term elasticities, whereas results for the USA are mixed. (ii) Short-term base-to-output elasticities tend to be smaller than unity, whereas long-term elasticities are close to unity. (iii) German and UK tax-to-output elasticities in the short term are lower than long-term elasticities, with mixed results for the USA. (iv) For tax-to-base elasticities, we find business-cycle asymmetries across countries but not within countries. (v) For base-to-output elasticities, our results suggest few asymmetries across countries and more asymmetries across tax types. (vi) Typically, the above conclusions do not hold for corporate income tax.

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Section: Base-to-gdp Elasticitiessupporting

confidence: 91%

Estimating policy-corrected long-term and short-term tax elasticities for the USA, Germany, and the United Kingdom

2022

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“…The second is tax revenue elasticity (TRE), which directly measures the relationship between tax revenues and a measure of aggregate income (e.g., Acquaah & Gelardi, 2008). The third is adjusted tax revenue elasticity (ATRE), where tax changes are measured in relation to changes in the corresponding tax bases (Bouthevillain et al, 2001).…”

Section: Review Of Empirical Studiesmentioning

confidence: 99%

The growth and variability of regional taxes: an application to Italy

2017

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The growth and variability of regional taxes: an application to Italy. Regional Studies. This paper investigates the potential\ud long-term growth and short-term cyclical stability of the Italian regional tax system. Short- and long-run elasticities with\ud respect to regional gross domestic product (GDP) are estimated between 2001 and 2012 for the surtax on central\ud personal income tax (RPIT) and for the regional tax on productive activities (RTPA). Cyclical reactions are more marked\ud for the RTPA and higher in the southern regions. Significant long-run growth of the RPIT and RTPA, on the other hand,\ud is found only in the northern regions. The results suggest that the behaviour of regional taxes may increase the Italian\ud north–south gap and cast some doubt on these taxes in financing essential public services, such as health, in each region

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“…Earlier papers have also indicated such effects. For example, Bouthevillain et al (2001), as well as Lurch and Tourini (2009) show that output composition effects matter at certain times; for example, these effects appeared in several EU countries in the late 1990s due to the Information Technology bubble, or in Italy through the 1990s due to strong external balance movements. More recently, the literature has emphasized the role of asset price cycles and credit booms.…”

Section: Structural Fiscal Balance Indicatorsmentioning

confidence: 99%