Recent U.S. Investment Incentives

Author/Editor:

Christopher M Towe

Publication Date:

December 1, 1993

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary:

The apparent slowdown in U.S. investment and productivity growth in recent years has led to a number of proposals to stimulate investment through the adoption of tax incentives. This paper describes the incentives that were contained in the February 1993 Budget and estimates their effect on the user cost of capital. The recent evidence regarding the effect of tax changes on investment in the United States is reviewed, and the likely effect of the Budget’s proposals on investment and overall economic activity is simulated. The simulations suggest that the proposals would have had a stimulative but largely transitory effect on U.S. investment and output.

Series:

Working Paper No. 93/92

Subject:

Notes:

Describes the incentives that were contained in the February 1993 Budget and estimates their effect on the use cost of capital.

English

Publication Date:

December 1, 1993

ISBN/ISSN:

9781451951455/1018-5941

Stock No:

WPIEA0921993

Price:

$15.00 (Academic Rate:$15.00)

Format:

Paper

Pages:

24

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