Are Tax Cuts Contractionary at the Zero Lower Bound? Evidence from a Century of Data
利用英国1918-2020年叙事识别的税收变化数据，检验新凯恩斯模型预测的零利率下限时减税紧缩效应，发现减税在低利率和正常时期均为扩张性，未发现通缩螺旋证据。
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 narrative-identified tax changes from 1918 to 2020, we show that tax cuts are expansionary in both low-interest-rate environments and more normal times. We do not find evidence of a deflationary spiral at the ZLB. Tax cuts may therefore still be a useful tool to stimulate economic activity when monetary policy is constrained.