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Author : Kevin Hassett
Publisher :
ISBN 13 :
Total Pages : 37 pages
Book Rating : 4.:/5 (129 download)
Download or read book Investment with uncertain tax policy written by Kevin Hassett and published by . This book was released on 1994 with total page 37 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Author : Kevin A. Hassett
Publisher :
ISBN 13 :
Total Pages : 43 pages
Book Rating : 4.:/5 (129 download)
Download or read book Investment with Uncertain Tax Policy written by Kevin A. Hassett and published by . This book was released on 2010 with total page 43 pages. Available in PDF, EPUB and Kindle. Book excerpt: In models with irreversible investment, increasing uncertainty about prices has been shown to increase the required rate of return (hurdle rate) and delay investment (e.g., Pindyck, 1988). One serious form of uncertainty faced by firms, a form that policy makers could conceivably control, is tax uncertainty. In this paper, we show that it does not follow from past work that tax policy uncertainty increases the expected hurdle price ratio and delays investment. This is because tax uncertainty has an unusual form that distinguishes it from price uncertainty: tax rates tend to remain constant for many years, and then change in large jumps. When tax policy follows a jump process, firms' expectations of the likelihood of the jump occurring have important effects on investment. Indeed, as we show below, while price uncertainty increases the hurdle rate and slows down investment, tax uncertainty has the opposite effect.
Author : Robert K. Dixit
Publisher : Princeton University Press
ISBN 13 : 1400830176
Total Pages : 484 pages
Book Rating : 4.4/5 (8 download)
Download or read book Investment under Uncertainty written by Robert K. Dixit and published by Princeton University Press. This book was released on 2012-07-14 with total page 484 pages. Available in PDF, EPUB and Kindle. Book excerpt: How should firms decide whether and when to invest in new capital equipment, additions to their workforce, or the development of new products? Why have traditional economic models of investment failed to explain the behavior of investment spending in the United States and other countries? In this book, Avinash Dixit and Robert Pindyck provide the first detailed exposition of a new theoretical approach to the capital investment decisions of firms, stressing the irreversibility of most investment decisions, and the ongoing uncertainty of the economic environment in which these decisions are made. In so doing, they answer important questions about investment decisions and the behavior of investment spending. This new approach to investment recognizes the option value of waiting for better (but never complete) information. It exploits an analogy with the theory of options in financial markets, which permits a much richer dynamic framework than was possible with the traditional theory of investment. The authors present the new theory in a clear and systematic way, and consolidate, synthesize, and extend the various strands of research that have come out of the theory. Their book shows the importance of the theory for understanding investment behavior of firms; develops the implications of this theory for industry dynamics and for government policy concerning investment; and shows how the theory can be applied to specific industries and to a wide variety of business problems.
Author : Kevin A. Hassett
Publisher : A E I Press
ISBN 13 : 9780844770864
Total Pages : 92 pages
Book Rating : 4.7/5 (78 download)
Download or read book Tax Policy and Investment written by Kevin A. Hassett and published by A E I Press. This book was released on 1999 with total page 92 pages. Available in PDF, EPUB and Kindle. Book excerpt: This book studies topics relating to fundamental tax reform. The topics include, among others, the effects of taxation on household saving, the effects of reducing taxes on individuals' work effort, issues in the taxation of financial services, and international issues in consumption taxation.
Author : Emanuel Kopp
Publisher : International Monetary Fund
ISBN 13 : 1498317758
Total Pages : 37 pages
Book Rating : 4.4/5 (983 download)
Download or read book U.S. Investment Since the Tax Cuts and Jobs Act of 2017 written by Emanuel Kopp and published by International Monetary Fund. This book was released on 2019-05-31 with total page 37 pages. Available in PDF, EPUB and Kindle. Book excerpt: There is no consensus on how strongly the Tax Cuts and Jobs Act (TCJA) has stimulated U.S. private fixed investment. Some argue that the business tax provisions spurred investment by cutting the cost of capital. Others see the TCJA primarily as a windfall for shareholders. We find that U.S. business investment since 2017 has grown strongly compared to pre-TCJA forecasts and that the overriding factor driving it has been the strength of expected aggregate demand. Investment has, so far, fallen short of predictions based on the postwar relation with tax cuts. Model simulations and firm-level data suggest that much of this weaker response reflects a lower sensitivity of investment to tax policy changes in the current environment of greater corporate market power. Economic policy uncertainty in 2018 played a relatively small role in dampening investment growth.
Author : Irem Guceri
Publisher :
ISBN 13 :
Total Pages : pages
Book Rating : 4.:/5 (116 download)
Download or read book Investment Responses to Tax Policy Under Uncertainty written by Irem Guceri and published by . This book was released on 2019 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: How does economic uncertainty affect the impact of tax policy? We exploit a natural experiment in which two very similar investment subsidies were implemented in the same country, two years apart: once during a period of economic stability, and once during a period of very high uncertainty. Exploiting sharp discontinuities in eligibility and using rich administrative data, we find that firms exposed to high uncertainty decide to “wait and see” before investing, despite generous incentives. Firms that are sheltered from uncertainty still respond strongly to policy. This implies that periods of stability offer an important policy opportunity to encourage investment.
Author : Hjalmar Böhm
Publisher :
ISBN 13 :
Total Pages : 23 pages
Book Rating : 4.:/5 (535 download)
Download or read book Optimal Investment Strategies Under Demand and Tax Policy Uncertainty written by Hjalmar Böhm and published by . This book was released on 2000 with total page 23 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Download or read book Optimal Investment Strategies under Demand & Tax Policy Uncertainty written by and published by . This book was released on 2000 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:
Author : Robert S. Pindyck
Publisher : World Bank Publications
ISBN 13 :
Total Pages : 58 pages
Book Rating : 4./5 ( download)
Download or read book Irreversibility, Uncertainty, and Investment written by Robert S. Pindyck and published by World Bank Publications. This book was released on 1989 with total page 58 pages. Available in PDF, EPUB and Kindle. Book excerpt: Irreversible investment is especially sensitive to such risk factors as volatile exchange rates and uncertainty about tariff structures and future cash flows. If the goal of macroeconomic policy is to stimulate investment, stability and credibility may be more important than tax incentives or interest rates.
Author : Luis H. R. Álvarez
Publisher :
ISBN 13 : 9789514579035
Total Pages : 28 pages
Book Rating : 4.5/5 (79 download)
Download or read book Tax Policy Uncertainty and Corporate Investment written by Luis H. R. Álvarez and published by . This book was released on 1997 with total page 28 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Author : Woojin Youn
Publisher :
ISBN 13 :
Total Pages : 366 pages
Book Rating : 4.3/5 (129 download)
Download or read book Essays on Asymmetries, Uncertainty, and Investment written by Woojin Youn and published by . This book was released on 1998 with total page 366 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Author : Luis W. Alvarez
Publisher :
ISBN 13 :
Total Pages : 28 pages
Book Rating : 4.:/5 (596 download)
Download or read book Tax Policy Uncertainty and the Corporation written by Luis W. Alvarez and published by . This book was released on 1997 with total page 28 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Author : Nancy L. Stokey
Publisher :
ISBN 13 :
Total Pages : pages
Book Rating : 4.:/5 (862 download)
Download or read book Wait-and-See written by Nancy L. Stokey and published by . This book was released on 2013 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: This paper develops a model of investment decisions in which uncertainty about a one-time change in tax policy induces the firm to temporarily stop investing-to adopt a wait-and-see policy. After the uncertainty is resolved, the firm exploits the tabled projects, generating a temporary investment boom.
Author : David C. Mauer
Publisher :
ISBN 13 :
Total Pages : pages
Book Rating : 4.:/5 (129 download)
Download or read book Investment Under Uncertainty written by David C. Mauer and published by . This book was released on 1998 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: We analyze the determinants of replacement investment decisions in a contingent claims model with maintenance and operation cost uncertainty. We find that the optimal time between replacements is increasing in the volatility of cost, the purchase price of a new asset and the corporate tax rate; and is decreasing in the systematic risk of cost, the salvage value of the asset and the investment tax credit. The optimal time between replacements can either increase or decrease with an increase in the depreciation rate. Extensions of the model to examine the effects of technological and tax policy uncertainty on replacement investment decisions give intuitive, but striking results. Uncertainty about the arrival of a technological innovation that would decrease maintenance and operation cost results in a significant decrease in replacement investment. Uncertainty in a tax law change that would encourage investment, decreases current investment; and uncertainty in a tax law change that would discourage investment, increases current investment.
Author : Rainer Niemann
Publisher :
ISBN 13 :
Total Pages : 48 pages
Book Rating : 4.:/5 (13 download)
Download or read book Investment Effects of Wealth Taxes Under Uncertainty and Irreversiblity written by Rainer Niemann and published by . This book was released on 2015 with total page 48 pages. Available in PDF, EPUB and Kindle. Book excerpt: The growing dissatisfaction with perceived distributional inequality and budgetary constraints gave rise to a discussion on the (re-)introduction of wealth taxes. Wealth taxes are typically levied on private wealth, in some countries also on corporate wealth. To avoid misleading statements concerning possible distributional consequences of wealth taxes, preceding analyses of the economic and particularly investment effects are necessary. As investments drive job creation, tax-induced changes in investment timing may significantly affect the income and wealth distribution. We analyze the impact of wealth taxes on investment timing under uncertainty and irreversibility and the propensity to carry out risky projects. Using a Dixit/Pindyck type real options model we find that wealth taxes have real effects. This means that higher wealth tax rates can either stimulate or depress the propensity to invest in risky projects. We find that apparently paradoxical wealth tax effects (accelerated investment due to higher wealth tax rates) are more likely for low interest rates and for high-risk investments. Using either historical cost or fair value accounting may affect investment timing ambiguously. Thus, the design of wealth taxes is crucial for the resulting delay or acceleration of investment. Although our model takes an individual perspective, our findings are also relevant for the current tax policy discussion on the introduction of wealth taxes. Our results indicate that wealth taxes are particularly harmful for specific classes of investments, for example low-risk investments.
Author : Stephen Thomas Limberg
Publisher :
ISBN 13 :
Total Pages : 546 pages
Book Rating : 4.:/5 (895 download)
Download or read book An Evaluation of Tax Policy and Investment Structure Uncertainty in Condominium Conversions written by Stephen Thomas Limberg and published by . This book was released on 1982 with total page 546 pages. Available in PDF, EPUB and Kindle. Book excerpt:
Author : Irem Guceri
Publisher : International Monetary Fund
ISBN 13 : 1475591179
Total Pages : 43 pages
Book Rating : 4.4/5 (755 download)
Download or read book Effectiveness of Fiscal Incentives for R&D written by Irem Guceri and published by International Monetary Fund. This book was released on 2017-03-31 with total page 43 pages. Available in PDF, EPUB and Kindle. Book excerpt: With growing academic and policy interest in research and development (R&D) tax incentives, the question about their effectiveness has become ever more relevant. In the absence of an exogenous policy reform, the simultaneous determination of companies’ tax positions and their R&D spending causes an identification problem in evaluating tax incentives. To overcome this identification challenge, we exploit a U.K. policy reform and use the population of corporation tax records that provide precise information on the amount of firm-level R&D expenditure. Using difference-in-differences and other panel regression approaches, we find a positive and significant impact of tax incentives on R&D spending, and an implied user cost elasticity estimate of around -1.6. This translates to more than a pound in additional private R&D for each pound foregone in corporation tax revenue.
