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arXiv · 2104.03261

Min(d)ing the President: A text analytic approach to measuring tax news

Lenard Lieb·Adam Jassem·Rui Jorge Almeida·Nalan Baştürk·Stephan Smeekes
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Abstract

Economic agents react to signals about future tax policy changes. Consequently, estimating their macroeconomic effects requires identification of such signals. We propose a novel text analytic approach for transforming textual information into an economically meaningful time series. Using this method, we create a tax news measure from all publicly available post-war communications of U.S. presidents. Our measure predicts the direction and size of future tax changes and contains signals not present in previously considered (narrative) measures of tax changes. We investigate the effects of tax news and find that, for long anticipation horizons, pre-implementation effects lead initially to contractions in output.

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Lenard Lieb, Adam Jassem, Rui Jorge Almeida, Nalan Baştürk, Stephan Smeekes. 2021-04-07. Min(d)ing the President: A text analytic approach to measuring tax news. https://arxiv.org/abs/2104.03261

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