Output effects of a measure of tax shocks based on changes in legislation for Portugal

This paper develops a new measure of quarterly discretionary tax shocks for Portugal that result from changes in legislation, following the narrative approach. It covers the years from 1996 to 2012 and was based on a comprehensive analysis of tax policy measures taken in the course of this period. The …ndings point to strongly negative and persistent e¤ects of legislated tax increases on GDP and private consumption, matching the tendency of the narrative approach to yield comparatively high tax multipliers.