Dynamic Scoring: A Back-of-the-Envelope Guide / N. Gregory Mankiw, Matthew Weinzierl.

Format:

Book

Author/Creator:

Mankiw, N. Gregory.

Contributor:

National Bureau of Economic Research.

Weinzierl, Matthew.

Series:

Working Paper Series (National Bureau of Economic Research) no. w11000.

NBER working paper series no. w11000

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Other Title:

Dynamic Scoring

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2004.

Summary:

This paper uses the neoclassical growth model to examine the extent to which a tax cut pays for itself through higher economic growth. The model yields simple expressions for the steady-state feedback effect of a tax cut. The feedback is surprisingly large: for standard parameter values, half of a capital tax cut is self-financing. The paper considers various generalizations of the basic model, including elastic labor supply departures from infinite horizons, and non-neoclassical production settings. It also examines how the steady-state results are modified when one considers the transition path to the steady state.

Notes:

Print version record

December 2004.