【Job Talk】Aggregate Implications of Corporate Taxation over the Business Cycle
2025/01/07
研討會日期 : 2025-01-07
時間 : 10:30
主講人 : Mr. Hui-Jun Chen (陳惠鈞)
地點 : Conference Room B110
主持人 : Professor Tsung-Hsien Li
演講者簡介 : Mr. Chen is expected to receive his Ph.D. in Economics from the Ohio State University in 2025. His research fields are Macroeconomics and International Economics. He is applying for a position of the Institute of Economics, Academia Sinica now.
演講摘要 : Corporate tax deductions are widely employed as countercyclical policies, yet their impact on the business cycle and interactions with other policies remain largely understudied. I examine the cyclical implications of such deductions by developing a novel dynamic stochastic general equilibrium model in which firms face credit market imperfections and idiosyncratic productivity shocks. In my model, firms’ investment decisions are distorted by collateralized borrowing and corporate taxation, and investment expenditures can be deducted from taxable income through targeted or untargeted accelerated depreciation policies. My model quantitatively replicates empirical estimates of the distribution of short-run elasticities of investment across firm size to changes in deduction policies. I show that raising deductions can reduce the severity and persistence of recessions by alleviating capital misallocation for productive firms. Applying my model to the policies in the US 2017 Tax Cuts and Jobs Act, I find that the targeted policy is 30 percent more effective than the untargeted policy in stimulating aggregate output. Furthermore, combining both policies reduces the overall effectiveness by 17 percent, revealing potential inefficiencies in current US tax policy implementation.
