Are Tax Cuts Contractionary at the Zero Lower Bound? Evidence from a Century of Data

Popular New Keynesian macroeconomic models predict that cuts in various types of distortionary taxes are contractionary when monetary policy is constrained at the zero lower bound (ZLB). We turn to a long span of history in the United Kingdom to test this hypothesis. Using a new long-run dataset of...

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Bibliographic Details
Published in:The Journal of political economy 2025-02, Vol.133 (2), p.568-603
Main Authors: Cloyne, James, Dimsdale, Nicholas, Hürtgen, Patrick
Format: Article
Language:English
Subjects:
Economic activity
Macroeconomics
Monetary policy
Taxation
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