Dynamic Scoring: A Back-of-the-Envelope Guide
Citation
Mankiw, N. Gregory and Matthew Weinzierl. 2005. Dynamic scoring: A back-of-the-envelope guide. Harvard Institute of Economic Research Working Papers 11000.Abstract
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.Terms of Use
This article is made available under the terms and conditions applicable to Other Posted Material, as set forth at http://nrs.harvard.edu/urn-3:HUL.InstRepos:dash.current.terms-of-use#LAACitable link to this page
http://nrs.harvard.edu/urn-3:HUL.InstRepos:2770515
Collections
- FAS Scholarly Articles [18304]
- HBS Scholarly Articles [861]
Contact administrator regarding this item (to report mistakes or request changes)