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The Effects of Tax Changes at the Zero Lower Bound: Evidence from Japan

Author

Listed:
  • Akihisa Kato
  • Wataru Miyamoto
  • Thuy Lan Nguyen
  • Dmitriy Sergeyev

Abstract

We use the narrative approach to identify tax changes unrelated to current economic conditions and estimate the effects of these changes on macroeconomic variables during and outside of the zero lower bound period in Japan. We find little difference in the output responses across the two periods. However, the responses of aggregate consumption, investment, and imports are significantly different in the two periods within the first few quarters.

Suggested Citation

  • Akihisa Kato & Wataru Miyamoto & Thuy Lan Nguyen & Dmitriy Sergeyev, 2018. "The Effects of Tax Changes at the Zero Lower Bound: Evidence from Japan," AEA Papers and Proceedings, American Economic Association, vol. 108, pages 513-518, May.
    • Handle: RePEc:aea:apandp:v:108:y:2018:p:513-18
    Note: DOI: 10.1257/pandp.20181060
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    Citations

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    Cited by:

    1. Georgios Karras, 2019. "Macroeconomic Effects of Tax Changes: Evidence from a Sample of OECD Countries," SPOUDAI Journal of Economics and Business, SPOUDAI Journal of Economics and Business, University of Piraeus, vol. 69(3), pages 111-138, July-Sept.
    2. James Cloyne & Òscar Jordà & Alan M. Taylor, 2023. "State-Dependent Local Projections: Understanding Impulse Response Heterogeneity," Working Paper Series 2023-05, Federal Reserve Bank of San Francisco.
    3. Shin-ichi Fukuda & Naoto Soma, 2021. "Evaluation of Japan’s Macro-Fiscal Policy and its Challenges," Public Policy Review, Policy Research Institute, Ministry of Finance Japan, vol. 17(2), pages 1-28, November.
    4. Kameda, Taisuke & Namba, Ryoichi & Tsuruga, Takayuki, 2021. "Decomposing local fiscal multipliers: Evidence from Japan," Japan and the World Economy, Elsevier, vol. 57(C).
    5. Jørgensen, Peter L. & Ravn, Søren H., 2022. "The inflation response to government spending shocks: A fiscal price puzzle?," European Economic Review, Elsevier, vol. 141(C).
    6. Miyazaki, Tomomi & Hiraga, Kazuki & Kozuka, Masafumi, 2024. "Stock market response to public investment under the zero lower bound: Cross-industry evidence from Japan," Journal of the Japanese and International Economies, Elsevier, vol. 71(C).
    7. Fukuda, Shin-ichi, 2023. "Evaluation of fiscal policy using alternative GDP data in Japan," Japan and the World Economy, Elsevier, vol. 67(C).
    8. Dennis Bonam & Paul Konietschke, 2020. "Tax multipliers across the business cycle," Working Papers 699, DNB.

    More about this item

    JEL classification:

    • E21 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Consumption; Saving; Wealth
    • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; Capacity
    • E23 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Production
    • E43 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Interest Rates: Determination, Term Structure, and Effects
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General

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