ABSTRACT

Following the Romer and Romer narrative approach (RR), this paper investigates the effects of tax changes (personal income tax and value added tax in particular) on economic activity in Croatia. We use the narrative approach to identify exogenous tax shocks and construct a unique time series of these shocks for the 2004–2019 period. However, as Croatia is a small open economy, we adjust the original RR modelling approach by taking into account the relevance of external (demand) shocks. Our results indicate that positive tax shocks lead to a fall in private consumption and output in the Keynesian manner. We show that, compared to direct taxes, indirect taxes exercise a stronger effect on macroeconomic aggregates, but the effect of direct taxes is statistically significant throughout the whole time horizon and does not fade out. As the main contributions of this paper to the existing literature, we highlight the following: firstly, this paper sets forth the first estimates of the macroeconomic effects of tax changes based on the narrative approach in the case of a developing economy; secondly, this study extends the original RR approach by including the effects of external shocks, making this approach more suitable for the analysis of fiscal policy in small open economies.

摘要

遵循 Romer 和 Romer 叙事方法 (RR)，本文调查了税收变化（特别是个人所得税和增值税）对克罗地亚经济活动的影响。我们使用叙事方法来识别外生税收冲击，并构建 2004-2019 年期间这些冲击的独特时间序列。然而，由于克罗地亚是一个小型开放经济体，我们通过考虑外部（需求）冲击的相关性来调整原始 RR 建模方法。我们的结果表明，正的税收冲击导致私人消费和产出以凯恩斯主义的方式下降。我们表明，与直接税相比，间接税对宏观经济总量的影响更大，但在整个时间范围内，直接税的影响在统计上是显着的，并且不会消失。作为本文对现有文献的主要贡献，我们强调以下几点：首先，本文基于发展中经济体的叙述方法对税收变化的宏观经济影响进行了初步估计；其次，本研究扩展了原始 RR 方法，包括外部冲击的影响，使该方法更适合于分析小型开放经济体的财政政策。