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Global tax policy and the synchronization of business cycles
Using a 30-year panel of quarterly GDP ?uctuations from of a broad set of countries, we demonstrate that the signing of a bilateral tax treaty increases the comovement of treaty partners' business cycles by 1/2 a standard deviation. This e?ect of ?scal policy is as large as the e?ect of trade linkages on comovement, and stronger than the e?ects of several other common ?nancial and investment linkages. We also show that bilateral tax treaties increase comovement in shocks to nations? GDP trends, demonstrating the permanent e?ects of coordination on ?scal policy rules. We estimate trend and ...
The Causal Effects of Lockdown Policies on Health and Macroeconomic Outcomes
We assess the causal impact of epidemic-induced lockdowns on health and macroeconomic outcomes and measure the trade-off between containing the spread of an epidemic and economic activity. To do so, we estimate an epidemiological model with time-varying parameters and use its output as information for estimating SVARs and LPs that quantify the causal effects of nonpharmaceutical policy interventions. We apply our approach to Belgian data for the COVID-19 epidemic during 2020. We find that additional government mandated mobility curtailments would have reduced deaths at a very small cost in ...