TY  - JOUR
AU  - Auerbach,Alan J.
AU  - Hassett,Kevin
TI  - Tax Policy and Business Fixed Investment in the United States
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 3619
PY  - 1992
Y2  - June 1992
UR  - http://www.nber.org/papers/w3619
L1  - http://www.nber.org/papers/w3619.pdf
N1  - Author contact info:
Alan J. Auerbach
Department of Economics
508-1 Evans Hall, #3880
University of California, Berkeley
Berkeley, CA 94720-3880
Tel: 510/643-0711
Fax: 510/643-0413
E-Mail: auerbach@econ.berkeley.edu

Kevin Hassett
American Enterprise Institute
1150 Seventeenth Street, N.W.
Washington, DC 20036
E-Mail: khassett@aei.org
AB  - This paper derives and estimates models of nonresidential investment behavior in which current and future tax conditions directly affect the incentive to invest. The estimates suggest that taxes have played an independent role in affecting postwar U.S. investment behavior, particularly for investment in machinery and equipment. In addition, the paper develops a method for assessing the impact of tax policy on the volatility of investment when such policy is endogenous. Illustrative calculations using this technique, based on the paper's empirical estimates, suggest that tax policy has not served to stabilize investment in equipment or nonresidential structures during the sample period.
ER  -