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Title: Fiscal spillovers: The case of us corporate and personal income taxes Authors:  Daniela Hauser - Bank of Canada (Canada) [presenting]
Romanos Priftis - Bank of Canada (Canada)
Madeline Hanson - Bank of Canada (Canada)
Abstract: The aim is to extend the narrative identification of unanticipated tax changes in the US to 2019Q4, and to empirically assess the propagation of corporate and personal income tax shocks to a panel of the US main trading partners. A cut in both taxes leads to short-run expansions domestically, but their spillover effects differ markedly. A cut in corporate taxes produces negative spillovers, indicating that contractionary effects associated with the reallocation of investment and jobs of multinational firms outweigh potential positive effects through increased demand for country-specific goods through trade. The spillover effects of lower personal income taxes are more heterogeneous across countries, but positive.