TY - BOOK ID - 136387471 TI - Fiscal Policy, Profits, and Investment AU - Alesina, Alberto. AU - Ardagna, Silvia. AU - Perotti, Roberto. AU - Schiantarelli, Fabio. AU - National Bureau of Economic Research. PY - 1999 PB - Cambridge, Mass. National Bureau of Economic Research DB - UniCat KW - Corporate profits. KW - Profit. UR - https://www.unicat.be/uniCat?func=search&query=sysid:136387471 AB - This paper evaluates the effects of fiscal policy on investment using a panel of OECD countries. In particular, we investigate how different types of fiscal policy affect profits and , as a result, investment. We find a sizable negative effect of public spending -- and in particular of its public wage component -- on business investment. This result is consistent with models in which government employment creates wage pressure for the private sector. Various types of taxes also have negative effects on profits, but, interestingly, the effects of government spending on investment are larger than the effect of taxes. Our results have important implications for the so called 'Non-Keynesian' (i.e. expansionary) effects of fiscal adjustments. ER -