Research
New study shows COVID value-added tax cut significantly boosted private consumption
Phys.org ·
The Brief
- In summer 2020 Germany cut its value-added tax from 19% to 16% for half a year as part of its COVID stimulus package.
- A new study in the Review of Economic Studies uses survey data and retail purchase data to assess the effect on private consumption.
- The study reports that the VAT cut significantly boosted private consumption.
Why it matters
The study provides empirical evidence on how a temporary consumption tax cut affects household spending, which is relevant to economists and policymakers evaluating fiscal stimulus.
Who’s affected
- economists and economic policy researchers
- policymakers evaluating fiscal stimulus measures
- #economics
- #fiscal policy
- #consumption
- #vat
- #germany
In summer 2020, the German federal government lowered value-added tax from 19% to 16% for half a year as part of its COVID economic stimulus package. A new study, recently published in the journal Review of Economic Studies, uses survey data, data on retail purchases and an…
Timeline
German federal government lowered value-added tax from 19% to 16% for half a year as part of COVID stimulus package
Study on the VAT cut's effect on private consumption reported as recently published in Review of Economic Studies
Science News - Mathematics, Economics, Archaeology, Fossils
New study shows COVID value-added tax cut significantly boosted private consumption