Working Paper
Inflation, taxes, and the durability of capital
Cohen, Darrel; Hassett, Kevin A. (1997)
Auerbach (1979, 1981) has demonstrated that inflation can lead to large inter-asset distortions, with the negative effects of higher inflation unambiguously declining with asset life. We show that this is true only if depreciation is treated as geometric for tax purposes. When depreciation is straightline, higher inflation can have the opposite effect, discouraging investment in long-lived assets. Since our current system can be thought of as a mixture of straightline and geometric, the sign of the inter-asset distortion is indeterminate. We show that under current U.S. tax rules, the ...
Finance and Economics Discussion Series , Paper 1997-53

Working Paper
Are U.S. investment and capital stocks at optimal levels?
Kennedy, James E.; Cohen, Darrel; Hassett, Kevin A. (1995)
Finance and Economics Discussion Series , Paper 95-32

Working Paper
Investment behavior, observable expectations, and internal funds
Oliner, Stephen D.; Hassett, Kevin A.; Cummins, Jason G. (1999)
We use earnings forecasts from securities analysts to construct more accurate measures of the fundamentals that affect the expected returns to investment. We find that investment responds significantly -- in both economic and statistical terms -- to our new measures of fundamentals. Our estimates imply that the elasticity of the investment-capital ratio with respect to a change in fundamentals is generally greater than unity. In addition, we find that internal funds are uncorrelated with investment spending, even for selected subsamples of firms -- those paying no dividends and those without ...
Finance and Economics Discussion Series , Paper 1999-27

Working Paper
Reassessing the social returns to equipment investment
Oliner, Stephen D.; Hassett, Kevin A.; Auerbach, Alan J. (1992)
Working Paper Series / Economic Activity Section , Paper 129

Working Paper
Investment and union certification
Fallick, Bruce; Hassett, Kevin A. (1996)
A growing body of work--both theoretical and empirical--has emphasized that unionization may be better understood as a tax on capital rather than a tax on labor. Under this "new" view, unionization unambiguously lowers investment. Using data on union certification elections, we estimate the impact of unionization on firms' investment behavior. Employing both a standard q-model and an "investment surprises" technique, we find that union certification significantly reduces investment. We find that a winning certification election has, on average, about the same effect on investment as would ...
Finance and Economics Discussion Series , Paper 96-43

Working Paper
Unionization and acquisitions
Fallick, Bruce; Hassett, Kevin A. (1995)
Finance and Economics Discussion Series , Paper 95-4

Working Paper
Who pays broad-based energy taxes? Computing lifetime and regional incidence
Metcalf, Gilbert E.; Hassett, Kevin A.; Bull, Nicholas (1993)
Working Paper Series / Economic Activity Section , Paper 142