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Fiscal Policy, Profits, and Investment / Alberto Alesina, Silvia Ardagna, Roberto Perotti, Fabio Schiantarelli.
- Format:
- Book
- Author/Creator:
- Alesina, Alberto.
- Series:
- Working Paper Series (National Bureau of Economic Research) no. w7207.
- NBER working paper series no. w7207
- Language:
- English
- Subjects (All):
- Corporate profits.
- Profit.
- Physical Description:
- 1 online resource: illustrations (black and white);
- Place of Publication:
- Cambridge, Mass. National Bureau of Economic Research 1999.
- Cambridge, Massachusetts : National Bureau of Economic Research, 1999.
- Summary:
- This paper evaluates the effects of fiscal policy on investment using a panel of OECD countries. In particular, we investigate how different types of fiscal policy affect profits and , as a result, investment. We find a sizable negative effect of public spending -- and in particular of its public wage component -- on business investment. This result is consistent with models in which government employment creates wage pressure for the private sector. Various types of taxes also have negative effects on profits, but, interestingly, the effects of government spending on investment are larger than the effect of taxes. Our results have important implications for the so called 'Non-Keynesian' (i.e. expansionary) effects of fiscal adjustments.
- Notes:
- Print version record
- July 1999.
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