Fuest, Clemens; Neumeier, Florian; Stöhlker, Daniel - 2019
The 'starving the beast' hypothesis claims that tax cuts lead to lower public spending, rather than higher debt levels … the period from 1992 to 2011, and assess to what extent exogenous changes in tax revenues affect aggregate public … fiscal policy. Our results suggest that an exogenous decrease in tax revenues triggers a reduction in public spending of …