Tax Changes and Composition of Fixed Investment: An Aggregative Simulation

RESULTS OF SIMULATIONS OF THE IMPACT OF THE TAX REFORM ACT OF 1969 ON HOUSING, PRODUCERS STRUCTURES AND PRODUCERS DURABLE EQUIPMENT BASED ON THE INVESTMENT SECTOR OF THE FRB-MIT MODEL. SECTION 1 DESCRIBES THE INVESTMENT SECTOR OF FRB-MIT MODEL AND THE RELATIONSHIPS AMONG VARIOUS INTEREST RATES AND R...

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Bibliographic Details
Published in:The review of economics and statistics 1972-11, Vol.54 (4), p.343-356
Main Authors: Aaron, Henry J., Russek, Frank S., Singer, Neil M.
Format: Article
Language:English
Subjects:
Capital costs
Capital gains
Capital investments
Economic impact
Financial investments
Forecasts
Housing
Income taxes
Interest rates
Investment plans
Investment return rates
Investment tax credits
Simulation
Tax Reform Act 1969-US
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Summary:RESULTS OF SIMULATIONS OF THE IMPACT OF THE TAX REFORM ACT OF 1969 ON HOUSING, PRODUCERS STRUCTURES AND PRODUCERS DURABLE EQUIPMENT BASED ON THE INVESTMENT SECTOR OF THE FRB-MIT MODEL. SECTION 1 DESCRIBES THE INVESTMENT SECTOR OF FRB-MIT MODEL AND THE RELATIONSHIPS AMONG VARIOUS INTEREST RATES AND RATES-OF-RETURN. SECTION 2 DESCRIBES MODIFICATIONS OF THE BASIC MODEL MADE TO ALLOW FOR INCREASED DETAIL IN THE TREATMENT OF CAPITAL GAINS AND TO IMPROVE THE OVERALL STABILITY OF THE ESTIMATES. SECTION 3 CITES THE RESULTS OF THE SIMULATION. TWO SETS OF SIMULATIONS ARE SHOWN, ONE HOLDING THAT THE RENTAL RATE ON MULTIFAMILY HOUSING AND THE IMPLICIT DEFLATOR FOR BUSINESS INCOME WILL GROW ANNUALLY BY 4 PERCENT, HOUSING CONSTRUCTION COSTS BY 5.6 PERCENT AND PLANT EXPENDITURES BY 7.3 PERCENT. TABLES.
ISSN:0034-6535
1530-9142
DOI:10.2307/1924561