Tax shocks, firm entry, and productivity in the open economy
研究美国减税如何通过企业进入渠道提高国内生产率、增加企业数量，并引发贸易逆差和实际汇率贬值，同时对外国消费和投资产生正向溢出效应。
We examine the role of endogenous firm entry for the domestic effects and international repercussions of tax policy. We present new evidence from proxy-vector autoregressions that exogenous US tax reductions increase hourly labor productivity and firm creation domestically, and induce higher trade deficits and real depreciation with respect to the other G7 countries, with positive spillovers to foreign consumption and investment. We show that the empirical evidence is compatible with a two-country model with endogenous firm entry. The entry channel provides a strong amplification mechanism for the supply effects of tax shocks at home and leads to persistent spillovers to the foreign economies. • The paper estimates the international transmission effects of US tax shocks. • Tax cuts raise productivity and firm entry, and have strong international spillovers. • The evidence is compatible with a two-country model with endogenous firm entry.