Replication data for: Do Output Contractions Cause Investment in Fiscal Capacity?
- Gillitzer, Christian
AbstractThis paper shows that an economic slump can induce a government to invest in fiscal capacity. Large negative income shocks stress the revenue-raising capability of narrow tax bases, making an increase in tax base breadth desirable relative to its fixed implementation cost. A broader tax base enables revenue to be raised at lower tax rates, and so lower deadweight loss. The behavior of US state governments during the Great Depression supports the model: states experiencing larger than average negative income shocks were more likely to adopt a retail sales tax than were states experiencing smaller than average income shocks.
Is supplement to
DOI: 10.1257/pol.20150161 (Text)
Gillitzer, Christian. “Do Output Contractions Cause Investment in Fiscal Capacity?” American Economic Journal: Economic Policy 9, no. 2 (May 2017): 189–227. https://doi.org/10.1257/pol.20150161.
- ID: 10.1257/pol.20150161 (DOI)
Update Metadata: 2020-05-18 | Issue Number: 2 | Registration Date: 2019-10-13