Dynamic Scoring: A Back-of-the-Envelope Guide

N. Gregory Mankiw, Matthew Weinzierl

NBER Working Paper No. 11000
Issued in December 2004
NBER Program(s):The Economic Fluctuations and Growth Program

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.

A non-technical summary of this paper is available in the July 2005 NBER Digest.  You can sign up to receive the NBER Digest by email.

A non-technical summary of this paper is available in the NBER Bulletin on Aging and Health. You can sign up to receive the NBER Bulletin on Aging and Health by email.

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w11000

Published: Mankiw, N. Gregory and Matthew Weinzierl. "Dynamic Scoring: A Back-of-the-Envelope Guide," Journal of Public Economics, 2006, v90(8-9,Sep), 1415-1433. citation courtesy of

Users who downloaded this paper also downloaded* these: