Macroeconomics Seminar Series. “The Dynamic Effects of Income Tax Changes in a World of Ideas”
Published: 19 February 2024
22 February. Dr Joseba Martinez, London Business School
Dr Joseba Martinez, London Business School
“The Dynamic Effects of Income Tax Changes in a World of Ideas”
Thursday, 22 February. 3 p.m.
Room 253 Gilbert Scott Building
Abstract
Using a narrative identification of US tax changes over the post-WWII period, we show that corporate income tax cuts foster R&D spending and innovation, leading to a persistent increase in aggregate productivity and output. In contrast, changes in the average personal income tax rate have mostly short-term effects. An estimated endogenous productivity model highlights the role of “applied research” - over and above formal R&D - as a main force behind these results, and suggests a social rate of return to investment in innovation between 20% and 75%.
Bio
Dr Joseba Martinez is a macro- and financial economist whose research interests include the effect of automation on productivity, economic growth, and income distribution. In addition, his work on the optimal design of banking system stress-tests has been published in the Review of Economic Studies.
He consults for a New York-based investment fund and has been a visiting scholar at the International Monetary Fund.
Before beginning his PhD he worked as a trader at ABN AMRO London and was senior manager at the European Bank for Reconstruction and Development.
He holds a BSc from University College London, an MSc from London School of Economics and Political Science and a PhD from New York University, all in economics.
For further information, please contact business-school-research@glasgow.ac.uk
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First published: 19 February 2024
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