8

8/paper.pdf

@@ -0,0 +1,3 @@
+version https://git-lfs.github.com/spec/v1
+oid sha256:e9d47c42aa79375b5ed9316e3a0a5319ff094cf7caf00700e47464b887a289de
+size 819908

8/replication_package/20111351_data/Figure10.m

@@ -0,0 +1,86 @@
+%%% Estimates figures from "Discretionary Tax Changes and the Macroeconomy: 
+%%% New Narrative Evidence from the United Kingdom" by James Cloyne, The American Economic Review.
+%%% Copyright J.S. Cloyne (2012)
+
+addpath('functions');
+clear all; close all; clc;
+
+%% Load data
+getdata
+
+%% Set lag structure
+P = 4; % VAR lags
+Q = 12; % Narrative shock lags (Q+1 in regression)
+
+%% Baseline regression
+data = [ loggov loggdp logcons loginv Infl nomi ];
+taxshock = X;
+
+%% Create tax shock and lags 
+taxlags = zeros(size(taxshock,1),Q);
+     for j=1:Q
+         taxlags(j+1:end,j)=taxshock(1:end-j,1);
+     end;
+
+[n,nvar]=size(data);
+irfhorizon = 16;
+
+%% Regression
+[beta u]=var_reg(data,taxshock,taxlags,P,Q,nvar); % No need to use the A0 this time
+
+%% Simulation
+history = size(taxshock,1);
+simulation=simul(beta,P,Q,nvar,taxshock,taxlags,history,data);
+
+%% HP filter
+simplot = zeros(size(simulation,1),size(data,2));
+actualplot = zeros(size(data,1),size(data,2));
+for n = 1:size(data,2);
+[s1] = hpfilter(simulation(:,n),1600);
+simplot(:,n) = simulation(:,n) - s1;
+[s2] = hpfilter(data(:,n),1600);
+actualplot(:,n) = data(:,n) - s2(:,1);
+end
+actualplot = actualplot(Q+1:end,:);
+
+%% Figure 10 plot
+figure('Position',[500 100 675 850])
+subplot(3,1,1) 
+zeroline = zeros(size(actualplot,1),1);
+plot(actualplot(5:end,2),'--k')
+hold on;
+plot(simplot(5:end,2),'b','LineWidth',2)
+plot(zeroline,':k');
+title('Output')
+set(gca,'XTick',[5 25 45 65 85 105 125 145 165 185])
+set(gca,'XTickLabel',{'1960','1965','1970','1975','1980','1985','1990','1995','2000','2005'})
+axis([0 size(actualplot,1) -4 5.5])
+box off;
+set(gcf, 'Color', 'w');
+
+subplot(3,1,2) 
+zeroline = zeros(size(actualplot,1),1);
+plot(actualplot(5:end,3),'--k')
+hold on;
+plot(simplot(5:end,3),'r','LineWidth',2)
+plot(zeroline,':k');
+title('Consumption')
+set(gca,'XTick',[5 25 45 65 85 105 125 145 165 185])
+set(gca,'XTickLabel',{'1960','1965','1970','1975','1980','1985','1990','1995','2000','2005'})
+axis([0 size(actualplot,1) -4 6.5])
+box off;
+set(gcf, 'Color', 'w');
+
+subplot(3,1,3) 
+zeroline = zeros(size(actualplot,1),1);
+plot(actualplot(5:end,4),'--k')
+hold on;
+plot(simplot(5:end,4),'c','LineWidth',2)
+plot(zeroline,':k');
+title('Investment')
+set(gca,'XTick',[5 25 45 65 85 105 125 145 165 185])
+set(gca,'XTickLabel',{'1960','1965','1970','1975','1980','1985','1990','1995','2000','2005'})
+legend('Actual','Tax shocks counterfactual');
+axis([0 size(actualplot,1) -10 10])
+box off;
+set(gcf, 'Color', 'w');

8/replication_package/20111351_data/Figure1and2.m

@@ -0,0 +1,79 @@
+%%% Estimates figures from "Discretionary Tax Changes and the Macroeconomy: 
+%%% New Narrative Evidence from the United Kingdom" by James Cloyne, The American Economic Review.
+%%% Copyright J.S. Cloyne (2012)
+
+addpath('functions');
+clear all; close all; clc;
+
+data1 =  xlsread('data.xlsx','Narratives');
+data2 =  xlsread('data.xlsx','Subgroups');
+
+N = data1(:,2);
+X = data1(:,3);
+T = X+N;
+
+DM	= data2(:,2);
+SS	= data2(:,3);
+DR	= data2(:,4);
+SD	= data2(:,5);
+LR	= data2(:,6);
+IL	= data2(:,7);
+DC	= data2(:,8);
+ET	= data2(:,9);
+
+%% Figure 1 Panel A
+figure
+plot(X,'k','LineWidth',1.25)
+hold on;
+title('Exogenous tax policy changes')
+ylabel('Percent');
+set(gca,'XTick',[ 9 49 89 129 169 209 249])
+set(gca,'XTickLabel',{'1950','1960','1970','1980','1990','2000','2010'})
+set(gca,'TickDir','Out') 
+box off;
+set(gcf, 'Color', 'w');
+
+%% Figure 1 Panel B
+figure
+hold on;
+plot(X,'k','LineWidth',1.25)
+plot(T,':b','LineWidth',1.25)
+title('Exogenous and all tax policy changes')
+ylabel('Percent');
+set(gca,'XTick',[ 9 49 89 129 169 209 249])
+set(gca,'XTickLabel',{'1950','1960','1970','1980','1990','2000','2010'})
+set(gca,'TickDir','Out') 
+box off;
+set(gcf, 'Color', 'w');
+legend('Exogenous','All policy changes')
+
+%% Figure 2 Panel A
+figure
+hold on;
+plot(IL,':b','LineWidth',1.25)
+plot(DC,'--m','LineWidth',1.25)
+plot(LR,'k','LineWidth',1.25)
+title('Subcomponents of the exogenous category')
+ylabel('Percent');
+set(gca,'XTick',[ 9 49 89 129 169 209 249])
+set(gca,'XTickLabel',{'1950','1960','1970','1980','1990','2000','2010'})
+set(gca,'TickDir','Out') 
+box off;
+set(gcf, 'Color', 'w');
+legend('Ideological','Deficit consolidation','Long-run')
+
+
+%% Figure 2 Panel B
+figure
+hold on;
+plot(DR,':b','LineWidth',1.25)
+plot(SD,'--m','LineWidth',1.25)
+plot(DM+SS,'k','LineWidth',1.25)
+title('Subcomponents of the endogenous category')
+ylabel('Percent');
+set(gca,'XTick',[ 9 49 89 129 169 209 249])
+set(gca,'XTickLabel',{'1950','1960','1970','1980','1990','2000','2010'})
+set(gca,'TickDir','Out') 
+box off;
+set(gcf, 'Color', 'w');
+legend('Deficit reduction','Spending-driven','Countercyclical')

8/replication_package/20111351_data/Figures3to9.m

@@ -0,0 +1,48 @@
+%%% Estimates figures from "Discretionary Tax Changes and the Macroeconomy: 
+%%% New Narrative Evidence from the United Kingdom" by James Cloyne, The American Economic Review.
+%%% Copyright J.S. Cloyne (2012)
+
+addpath('functions');
+clear all; close all; clc; clear;
+
+%% Choose figure to generate
+figure = 3; 
+% =3 (GDP),4 (US GDP), 5 (Consumption and Investment), 6.1 (Imports), 6.2
+% (Exports), 7.1 (real wages), 7.2 (hours worked), 8 (both panels), 9.1
+% (cut in long-run taxes) 9.2 (ideologically-motivated tax cut)
+% 9.3 (deficit consolidation tax rise)
+
+%% Load data
+getdata
+
+%% Set lag structure
+P = 4; % VAR lags
+Q = 12; % Narrative shock lags (Q+1 in regression)
+
+%% Transform data for regression
+setupdata
+
+%% Bootstrap and IRF controls   
+[n,nvar]=size(data);
+nreps = 1000; % Number of bootstrap repetitions: paper uses 10,000
+c68 = 68; 
+low68 = ceil((1-c68/100)/2*nreps); 
+high68 = nreps - low68;
+c95 = 95; 
+low95 = ceil((1-c95/100)/2*nreps); 
+high95 = nreps - low95;
+parametric = 0; % =1 to use parametric bootstrap
+irfhorizon = 16;
+
+%% Regression, IRFs and confidence intervals
+beta=var_reg(data,taxshock,taxlags,P,Q,nvar);
+impulse=irf(beta,P,Q,nvar,irfhorizon);
+[IRFLB68,IRFUB68,IRFLB95,IRFUB95]=bootstrap(nreps,data,taxshock,taxlags,irfhorizon,P,Q,high68,low68,high95,low95,parametric);
+impulse = impulse(Q+1:end,:)';
+IRFUB68 = IRFUB68';
+IRFLB68 = IRFLB68';
+IRFUB95 = IRFUB95';
+IRFLB95 = IRFLB95';
+
+%% Plot figures
+plotfigs3to9

8/replication_package/20111351_data/ReadMe.pdf

@@ -0,0 +1,3 @@
+version https://git-lfs.github.com/spec/v1
+oid sha256:98c8d58ebeb7fac81a400785ea3e598f5da82d0400eefb1e1fe2e78e81698249
+size 54052

8/replication_package/20111351_data/Table2.m

@@ -0,0 +1,52 @@
+%%% Estimates table 2 from "Discretionary Tax Changes and the Macroeconomy: 
+%%% New Narrative Evidence from the United Kingdom" by James Cloyne, The American Economic Review.
+%%% Copyright J.S. Cloyne (2012)
+
+addpath('functions');
+clear all; close all; clc; clear;
+
+%% Choose line of table
+line = 1; 
+% =1 (1955Q1-1979Q1); =2 (1979Q2-2008Q1); =3 (1955Q1-1972Q2); =4 (1972Q3-2009Q4)
+
+%% Load data
+getdata
+
+%% Set lag structure
+P = 4; % VAR lags
+Q = 12; % Narrative shock lags (Q+1 in regression)
+
+%% Transform data for regression
+setuptab
+
+%% Bootstrap and IRF controls   
+[n,nvar]=size(data);
+nreps = 1000; % Number of bootstrap repetitions: paper uses 10,000
+c68 = 68; 
+low68 = ceil((1-c68/100)/2*nreps); 
+high68 = nreps - low68;
+c95 = 95; 
+low95 = ceil((1-c95/100)/2*nreps); 
+high95 = nreps - low95;
+parametric = 0; % =1 to use parametric bootstrap
+irfhorizon = 16;
+
+%% Regression, IRFs and confidence intervals
+beta=var_reg(data,taxshock,taxlags,P,Q,nvar);
+impulse=irf(beta,P,Q,nvar,irfhorizon);
+[IRFLB68,IRFUB68,IRFLB95,IRFUB95]=bootstrap(nreps,data,taxshock,taxlags,irfhorizon,P,Q,high68,low68,high95,low95,parametric);
+impulse = impulse(Q+1:end,:)';
+IRFUB68 = IRFUB68';
+IRFLB68 = IRFLB68';
+IRFUB95 = IRFUB95';
+IRFLB95 = IRFLB95';
+
+%% Impacts
+display('Impact effect');
+impulse(1,1) %#ok<NOPTS>
+display('One s.d. confidence intervals');
+[IRFLB68(1,1) IRFUB68(1,1)] %#ok<NOPTS>
+display('Peak effect')
+max(impulse(1,:)) 
+display('One s.d. confidence intervals');
+[IRFLB68(1,find(impulse(1,:)==max(impulse(1,:)))) IRFUB68(1,find(impulse(1,:)==max(impulse(1,:))))] %#ok<NOPTS>

8/replication_package/20111351_data/data.xlsx

@@ -0,0 +1,3 @@
+version https://git-lfs.github.com/spec/v1
+oid sha256:d81d84b976bdd367fd082353d38adbc3e28ceb3681439959ea4e309b942a9bc8
+size 107921

8/replication_package/20111351_data/functions/bootstrap.m

@@ -0,0 +1,61 @@
+%%% Estimates figures from "Discretionary Tax Changes and the Macroeconomy: 
+%%% New Narrative Evidence from the United Kingdom" by James Cloyne, The American Economic Review.
+%%% Copyright J.S. Cloyne (2012)
+
+function [IRFLB68,IRFUB68,IRFLB95,IRFUB95]=bootstrap(nrep, data, taxshock,taxlags, irfhorizon, P,Q,high68,low68,high95,low95,parametric)
+[nobs,nvar]=size(data);
+trend = zeros(nobs,1);
+for kk = 2:nobs
+    trend(kk,:) = trend(kk-1,:)+1;
+end
+IRFLB68 = zeros(irfhorizon,1); IRFUB68 = zeros(irfhorizon,1); IRFLB95 = zeros(irfhorizon,1); IRFUB95 = zeros(irfhorizon,1);
+boots = [];
+
+%% Bootstrap
+for r=1:nrep;
+    rootmax = 100;
+while rootmax >= 1
+    [beta u]=var_reg(data,taxshock,taxlags,P,Q,nvar); 
+    draw = ceil((nobs-Q)*rand(nobs-Q,nvar));
+    datasim = zeros(nobs,nvar); 
+    resid = zeros(nvar,1);   
+    datasim(Q-P+1:Q,:) = data(Q-P+1:Q,:); 
+    if parametric ==0;
+    usim = u;
+    else
+        for b=1:size(u,2)
+        usim(:,b) = (std(u(:,b)))*randn(size(u,1),1);
+        end
+    end
+    for p=Q+1:nobs;
+        for q=1:nvar;
+            resid(q) = usim(draw(p-Q,q),q);           
+        end;
+        endogbs_lags = [];
+        for j=1:P
+        endogbs_lags = [endogbs_lags,datasim(p-j,:)];
+        end
+datasim(p,:) = [1 trend(p) endogbs_lags taxshock(p) taxlags(p,:)]*beta + resid';  
+    end;
+betasim=var_reg(datasim,taxshock,taxlags,P,Q,nvar);
+PI=zeros(nvar*P,nvar*P); % Companion matrix
+PI(nvar+1:nvar*P,1:nvar*(P-1))=eye(nvar*(P-1),nvar*(P-1));
+PI(1:nvar,1:nvar*P)=betasim(2+1:nvar*P+2,:)';
+rootmax=max(abs(eig(PI)));
+end;
+impsim=irf(betasim,P,Q,nvar,irfhorizon);
+boots = horzcat(boots,impsim(Q+1:irfhorizon+Q,:));
+end; 
+
+%% Construct 68% and 95% confidence intervals
+for zz=1:nvar; 
+    for qq=1:irfhorizon; 
+        dist = zeros(nrep,1);
+        for pp=1:nrep; 
+            dist(pp) = boots(qq,nvar*(pp-1)+zz); 
+        end; 
+        [sorted,dist2] = sort(dist); 
+        dist3 = dist(dist2); 
+        IRFLB68(qq,zz) = dist3(low68); IRFUB68(qq,zz) = dist3(high68); IRFLB95(qq,zz) = dist3(low95); IRFUB95(qq,zz) = dist3(high95); 
+    end;
+end;

8/replication_package/20111351_data/functions/chart.m

@@ -0,0 +1,17 @@
+function [ ] = chart(IRFUB95,IRFLB95,IRFUB68,IRFLB68,impulse,irfhorizon,variable)
+figure
+x = 1:irfhorizon;
+zeroline = zeros(irfhorizon,1);
+ha = shadedplot(x, IRFUB95(variable,:), IRFLB95(variable,:), [0.92 0.92 0.92], [0.92 0.92 0.92]);
+hold on;
+ha = shadedplot(x, IRFUB68(variable,:), IRFLB68(variable,:), [0.82 0.82 0.82], [0.82 0.82 0.82]);
+hold on;
+grid off;
+plot(impulse(variable,:),'-ok','MarkerSize',5)
+xlabel('Quarters');
+ylabel('Percent');
+hold on;
+plot(zeroline(1:irfhorizon),':k')
+%axis([1 irfhorizon -2 5])
+box off;
+set(gcf, 'Color', 'w');

8/replication_package/20111351_data/functions/getdata.m

@@ -0,0 +1,69 @@
+%%% Estimates figures from "Discretionary Tax Changes and the Macroeconomy: 
+%%% New Narrative Evidence from the United Kingdom" by James Cloyne, The American Economic Review.
+%%% Copyright J.S. Cloyne (2012)
+
+narratives =  xlsread('data.xlsx','Narratives');
+other =  xlsread('data.xlsx','Other');
+subcats = xlsread('data.xlsx','Subgroups');
+narratives = narratives(29:end,:); % Set sample 1955Q1 - 2009 Q4
+RR = xlsread('data.xlsx','RR data'); % RR (2010) US data: available from the AER website
+other = other(29:end,:); % Set sample 1955Q1 - 2009 Q4
+subcats = subcats(29:end,:);
+RR = RR(1:end,:);
+
+N = narratives(:,2);
+X = narratives(:,3);
+GDP = other(:,2); 
+Cons = other(:,3); 
+Gov = other(:,4); 
+Inv = other(:,5); 
+Exp = other(:,6); 
+Imp = other(:,7); 
+TME = other(:,8); 
+Infl = other(:,9); 
+nomi = other(:,10); 
+revs = other(:,11); 
+iop = other(:,12); 
+aei = other(:,13); 
+emploecd = other(:,14); 
+pop = other(:,15); 
+hours =other(:,16);
+tfp =other(:,17);
+ner=other(:,18);
+rer=other(:,19);
+emplons =other(:,20);
+
+IL = subcats(:,7); 
+LR = subcats(:,6); 
+DC = subcats(:,8); 
+
+GDPUS = RR(:,2); 
+ConsUS = RR(:,3); 
+InvUS = RR(:,4); 
+popUS = RR(:,5); 
+XUS = RR(:,6);
+
+all = X+N;
+
+%% Transform data: log per capita 
+loggdp = 100*log(GDP./pop);
+logcons = 100*log(Cons./pop);
+loggov = 100*log(Gov./pop);
+loginv = 100*log(Inv./pop);
+logexp = 100*log(Exp./pop);
+logimp = 100*log(Imp./pop);
+logrevs = 100*log(revs./pop);
+logwage = 100*log(aei);
+loghours = 100*log(hours);
+loggdpus = 100*log(GDPUS./popUS);
+logconsus = 100*log(ConsUS./popUS);
+loginvus = 100*log(InvUS./popUS);
+
+%% Data for annex charts
+logtfp = tfp;
+logner = 100*log(ner);
+logrer = 100*log(rer);
+logempons = 100*log((emplons/1000)./pop);
+logiop = 100*log(iop);
+logemploecd = 100*log(emploecd);
+logTME = 100*log(TME);

8/replication_package/20111351_data/functions/hpfilter.m

@@ -0,0 +1,86 @@
+function [s,desvabs] = hpfilter(y,w,plotter)
+%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%
+%   Author: Wilmer Henao    wi-henao@uniandes.edu.co
+%   Department of Mathematics
+%   Universidad de los Andes
+%   Colombia
+%
+%   Hodrick-Prescott filter extracts the trend of a time series, the output
+%   is not a formula but a new filtered time series.  This trend can be
+%   adjusted with parameter w; values for w lie usually in the interval
+%   [100,20000], and it is up to you to use the one you like, As w approaches infty, 
+%   H-P will approach a line.  If the series doesn't have a trend p.e.White Noise, 
+%   doing H-P is meaningles
+%
+%   [s] = hpfilter(y,w)
+%   w = Smoothing parameter (Economists advice: "Use w = 1600 for quarterly data")
+%   y = Original series
+%   s = Filtered series
+%   This program can work with several series at a time, as long as the
+%   number of series you are working with doesn't exceed the number of
+%   elements in the series + it uses sparse matrices which improves speed
+%   and performance in the longest series
+%   
+%   [s] = hpfilter(y,w,'makeplot')
+%   'makeplot' in the input, plots the graphics of the original series
+%   against the filtered series, if more than one series is being
+%   considered the program will plot all of them in different axes
+%
+%   [s,desvabs] = hpfilter(y,w)
+%   Gives you a mesure of the standardized differences in absolute values
+%   between the original and the filtered series.  A big desvabs means
+%   that the series implies a large relative volatility.
+% 
+% Copyright (c) 2003, Wilmer Henao
+% All rights reserved.
+% 
+% Redistribution and use in source and binary forms, with or without 
+% modification, are permitted provided that the following conditions are 
+% met:
+% 
+%     * Redistributions of source code must retain the above copyright 
+%       notice, this list of conditions and the following disclaimer.
+%     * Redistributions in binary form must reproduce the above copyright 
+%       notice, this list of conditions and the following disclaimer in 
+%       the documentation and/or other materials provided with the distribution
+%       
+% THIS SOFTWARE IS PROVIDED BY THE COPYRIGHT HOLDERS AND CONTRIBUTORS "AS IS" 
+% AND ANY EXPRESS OR IMPLIED WARRANTIES, INCLUDING, BUT NOT LIMITED TO, THE 
+% IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE 
+% ARE DISCLAIMED. IN NO EVENT SHALL THE COPYRIGHT OWNER OR CONTRIBUTORS BE 
+% LIABLE FOR ANY DIRECT, INDIRECT, INCIDENTAL, SPECIAL, EXEMPLARY, OR 
+% CONSEQUENTIAL DAMAGES (INCLUDING, BUT NOT LIMITED TO, PROCUREMENT OF 
+% SUBSTITUTE GOODS OR SERVICES; LOSS OF USE, DATA, OR PROFITS; OR BUSINESS 
+% INTERRUPTION) HOWEVER CAUSED AND ON ANY THEORY OF LIABILITY, WHETHER IN 
+% CONTRACT, STRICT LIABILITY, OR TORT (INCLUDING NEGLIGENCE OR OTHERWISE) 
+% ARISING IN ANY WAY OUT OF THE USE OF THIS SOFTWARE, EVEN IF ADVISED OF THE 
+% POSSIBILITY OF SUCH DAMAGE.
+%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%   
+
+if nargin < 2
+    error('Requires at least two arguments.');
+end
+
+[m,n] = size (y);
+if m < n
+    y = y';     m = n;
+end
+d = repmat([w -4*w ((6*w+1)/2)], m, 1);
+d(1,2) = -2*w;      d(m-1,2) = -2*w;
+d(1,3) = (1+w)/2;   d(m,3) = (1+w)/2;
+d(2,3) = (5*w+1)/2; d(m-1,3) = (5*w+1)/2;
+B = spdiags(d, -2:0, m, m);    %I use a sparse version of B, because when m is large, B will have many zeros     
+B = B+B';
+s = B\y;
+
+if nargin == 3
+    t = size(y,2);
+    for i = 1:t
+        figure(i)
+        plot(s(:,i),'r');   grid on;   hold on;   plot(y(:,i));   title(['Series #',num2str(i)]);
+    end
+end
+if nargout == 2
+    desvabs = mean(abs(y-s)./s);
+end
+%toc

8/replication_package/20111351_data/functions/irf.m

@@ -0,0 +1,24 @@
+%%% Estimates figures from "Discretionary Tax Changes and the Macroeconomy: 
+%%% New Narrative Evidence from the United Kingdom" by James Cloyne, The American Economic Review.
+%%% Copyright J.S. Cloyne (2012)
+
+function [impulse]=irf(beta,P,Q,nvar,irfhorizon)
+
+impulse = zeros(irfhorizon+(max(Q,P)),nvar);
+taxshocksim = zeros(irfhorizon+(max(Q,P)),1);
+taxshocksim(max(Q,P)+1) = -1; % The shock
+    
+taxlagssim = zeros(irfhorizon+(max(Q,P)),Q);
+for j=1:Q
+    taxlagssim(j+max(Q,P)+1:end,j)=taxshocksim(max(Q,P)+1:end-j,1);
+end;
+    
+m = Q;
+while m<irfhorizon+(max(Q,P));
+    m=m+1;
+    endog_lags = [];
+        for j=1:P
+        endog_lags = [endog_lags,impulse(m-j,:)];
+        end
+impulse(m,:) = [endog_lags taxshocksim(m) taxlagssim(m,:)]*beta(3:end,:);
+end;

8/replication_package/20111351_data/functions/lagmat.m

@@ -0,0 +1,11 @@
+%%% Estimates figures from "Discretionary Tax Changes and the Macroeconomy: 
+%%% New Narrative Evidence from the United Kingdom" by James Cloyne, The American Economic Review.
+%%% Copyright J.S. Cloyne (2012)
+
+function out = lagmat(inputmat,P,nvar)
+
+for j=1:P
+    for k=1:nvar
+        out(:,k+(j-1)*nvar)=inputmat(P+1-j:end-j,k);
+    end;
+end;

8/replication_package/20111351_data/functions/plotfigs3to9.m

@@ -0,0 +1,75 @@
+%%% Estimates figures from "Discretionary Tax Changes and the Macroeconomy: 
+%%% New Narrative Evidence from the United Kingdom" by James Cloyne, The American Economic Review.
+%%% Copyright J.S. Cloyne (2012)
+
+if figure==3
+    variable = 1;
+chart(IRFUB95,IRFLB95,IRFUB68,IRFLB68,impulse,irfhorizon,variable);
+title('Response of GDP to a 1 percent of GDP cut in taxes')
+axis([1 irfhorizon -2 4])
+
+elseif figure==4
+    variable = 1;
+chart(IRFUB95,IRFLB95,IRFUB68,IRFLB68,impulse,irfhorizon,variable);
+title('Response of GDP to a 1 percent of GDP cut in taxes: US Romer-Romer result')
+axis([1 irfhorizon -1 4])
+
+elseif figure ==5
+    variable = 2;
+chart(IRFUB95,IRFLB95,IRFUB68,IRFLB68,impulse,irfhorizon,variable);
+title('Response of consumption to a 1 percent of GDP cut in taxes')
+axis([1 irfhorizon -2 5])
+    variable = 3;
+chart(IRFUB95,IRFLB95,IRFUB68,IRFLB68,impulse,irfhorizon,variable);
+title('Response of investment to a 1 percent of GDP cut in taxes')
+axis([1 irfhorizon -4 10])
+   
+elseif figure ==6.1
+        variable = 4;
+chart(IRFUB95,IRFLB95,IRFUB68,IRFLB68,impulse,irfhorizon,variable);
+title('Response of imports to a 1 percent of GDP cut in taxes')
+axis([1 irfhorizon -3 10])
+elseif figure ==6.2
+variable = 4;
+chart(IRFUB95,IRFLB95,IRFUB68,IRFLB68,impulse,irfhorizon,variable);
+title('Response of exports to a 1 percent of GDP cut in taxes')
+axis([1 irfhorizon -6 8])
+
+elseif figure ==7.1
+    variable = 4;
+chart(IRFUB95,IRFLB95,IRFUB68,IRFLB68,impulse,irfhorizon,variable);
+title('Response of real wages to a 1 percent of GDP cut in taxes')
+axis([1 irfhorizon -2 5])
+elseif figure ==7.2
+variable = 5;
+chart(IRFUB95,IRFLB95,IRFUB68,IRFLB68,impulse,irfhorizon,variable);
+title('Response of hours worked per person to a 1 percent of GDP cut in taxes')
+axis([1 irfhorizon -1 1.5])
+
+elseif figure ==8
+    variable = 4;
+chart(IRFUB95,IRFLB95,IRFUB68,IRFLB68,impulse,irfhorizon,variable);
+title('Response of inflation to a 1 percent of GDP cut in taxes')
+axis([1 irfhorizon -3 6])
+
+variable = 5;
+chart(IRFUB95,IRFLB95,IRFUB68,IRFLB68,impulse,irfhorizon,variable);
+title('Response of the policy rate to a 1 percent of GDP cut in taxes')
+axis([1 irfhorizon -2 4])
+
+elseif figure ==9.1
+    variable = 1;
+chart(IRFUB95,IRFLB95,IRFUB68,IRFLB68,impulse,irfhorizon,variable);
+title('Response of GDP to a 1 percent of GDP cut in LR taxes')
+axis([1 irfhorizon -2 4.5])
+elseif figure ==9.2
+variable = 1;
+chart(IRFUB95,IRFLB95,IRFUB68,IRFLB68,impulse,irfhorizon,variable);
+title('Response of GDP to a 1 percent of GDP cut in IL taxes')
+axis([1 irfhorizon -3 8])
+elseif figure ==9.3
+variable = 1;
+chart(-IRFUB95,-IRFLB95,-IRFUB68,-IRFLB68,-impulse,irfhorizon,variable);
+title('Response of GDP to a 1 percent of GDP rise in taxes for deficit consolidation')
+axis([1 irfhorizon -15 15])
+end

8/replication_package/20111351_data/functions/setupdata.m

@@ -0,0 +1,49 @@
+%%% Estimates figures from "Discretionary Tax Changes and the Macroeconomy: 
+%%% New Narrative Evidence from the United Kingdom" by James Cloyne, The American Economic Review.
+%%% Copyright J.S. Cloyne (2012)
+
+if figure==3
+data = [ loggdp logcons loginv  ];
+taxshock = X;
+elseif figure==4
+    data = [ loggdpus logconsus loginvus ];
+    taxshock = XUS;
+elseif figure==5
+    data = [ loggdp logcons loginv ];
+    taxshock = X;
+elseif figure==6.1
+    data = [ loggdp logcons loginv logimp ];
+    taxshock = X;
+elseif figure==6.2
+    data = [ loggdp logcons loginv logexp ];
+    taxshock = X;
+elseif figure==7.1
+    data = [ loggdp logcons loginv logwage ];
+    data = data(61-29+1:end,:); % Limited sample for wages (hours worked are not that far back)
+    taxshock = X(61-29+1:end);
+elseif figure==7.2
+    data = [ loggdp logcons loginv logwage loghours ]; 
+    data = data(93-29+1:end,:); % Even more restricted sample for hours
+    taxshock = X(93-29+1:end);
+elseif figure==8
+    data = [ loggdp logcons loginv Infl nomi ]; 
+    taxshock = X;
+elseif figure==9.1
+    data = [ loggdp logcons loginv ]; 
+    taxshock = LR;
+elseif figure==9.2
+    data = [ loggdp logcons loginv ]; 
+    taxshock = IL;
+elseif figure==9.3
+    data = [ loggdp logcons loginv ]; 
+    taxshock = DC;
+else
+    display('Unknown figure number');
+    break
+end
+
+taxlags = zeros(size(taxshock,1),Q);
+     for j=1:Q
+         taxlags(j+1:end,j)=taxshock(1:end-j,1);
+     end;
+

8/replication_package/20111351_data/functions/setuptab.m

@@ -0,0 +1,30 @@
+%%% Estimates table 2 from "Discretionary Tax Changes and the Macroeconomy: 
+%%% New Narrative Evidence from the United Kingdom" by James Cloyne, The American Economic Review.
+%%% Copyright J.S. Cloyne (2012)
+
+if line==1
+data = [ loggdp logcons loginv  ];
+data = data(1:125-28,:);
+taxshock = X(1:125-28,:);
+elseif line==2
+data = [ loggdp logcons loginv  ];
+data = data(126-28-Q:241-28,:);
+taxshock = X(126-28-Q:241-28);
+elseif line==3
+data = [ loggdp logcons loginv  ];
+data = data(1:98-28,:);
+taxshock = X(1:98-28);
+elseif line==4
+data = [ loggdp logcons loginv  ];
+data = data(99-28-Q:end,:);
+taxshock = X(99-28-Q:end);
+else
+    display('Unknown table line number');
+    break
+end
+
+taxlags = zeros(size(taxshock,1),Q);
+     for j=1:Q
+         taxlags(j+1:end,j)=taxshock(1:end-j,1);
+     end;
+

8/replication_package/20111351_data/functions/shadedplot.m

@@ -0,0 +1,90 @@
+function [ha hb hc] = shadedplot(x, y1, y2, varargin)
+
+% SHADEDPLOT draws two lines on a plot and shades the area between those
+% lines.
+%
+% SHADEDPLOT(x, y1, y2)
+%   All of the arguments are vectors of the same length, and each y-vector is
+%   horizontal (i.e. size(y1) = [1  N]). Vector x contains the x-axis values,
+%   and y1:y2 contain the y-axis values.
+%
+%   Plot y1 and y2 vs x, then shade the area between those two
+%   lines. Highlight the edges of that band with lines.
+%
+%   SHADEDPLOT(x, y1, y2, areacolor, linecolor)
+%   The arguments areacolor and linecolor allow the user to set the color
+%   of the shaded area and the boundary lines. These arguments must be
+%   either text values (see the help for the PLOT function) or a
+%   3-element vector with the color values in RGB (see the help for
+%   COLORMAP).
+%
+%   [HA HB HC = SHADEDPLOT(x, y1, y2) returns three handles to the calling
+%   function. HA is a vector of handles to areaseries objects (HA(2) is the
+%   shaded area), HB is the handle to the first line (x vs y1), and HC is
+%   the handle to the second line (x vs y2).
+%
+%   Example:
+%
+%     x1 = [1 2 3 4 5 6];
+%     y1 = x1;
+%     y2 = x1+1;
+%     x3 = [1.5 2 2.5 3 3.5 4];
+%     y3 = 2*x3;
+%     y4 = 4*ones(size(x3));
+%     ha = shadedplot(x1, y1, y2, [1 0.7 0.7], 'r'); %first area is red
+%     hold on
+%     hb = shadedplot(x3, y3, y4, [0.7 0.7 1]); %second area is blue
+% %     hold off
+% 
+% Copyright (c) 2008, Dave Van Tol
+% All rights reserved.
+% 
+% Redistribution and use in source and binary forms, with or without 
+% modification, are permitted provided that the following conditions are 
+% met:
+% 
+%     * Redistributions of source code must retain the above copyright 
+%       notice, this list of conditions and the following disclaimer.
+%     * Redistributions in binary form must reproduce the above copyright 
+%       notice, this list of conditions and the following disclaimer in 
+%       the documentation and/or other materials provided with the distribution
+%       
+% THIS SOFTWARE IS PROVIDED BY THE COPYRIGHT HOLDERS AND CONTRIBUTORS "AS IS" 
+% AND ANY EXPRESS OR IMPLIED WARRANTIES, INCLUDING, BUT NOT LIMITED TO, THE 
+% IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE 
+% ARE DISCLAIMED. IN NO EVENT SHALL THE COPYRIGHT OWNER OR CONTRIBUTORS BE 
+% LIABLE FOR ANY DIRECT, INDIRECT, INCIDENTAL, SPECIAL, EXEMPLARY, OR 
+% CONSEQUENTIAL DAMAGES (INCLUDING, BUT NOT LIMITED TO, PROCUREMENT OF 
+% SUBSTITUTE GOODS OR SERVICES; LOSS OF USE, DATA, OR PROFITS; OR BUSINESS 
+% INTERRUPTION) HOWEVER CAUSED AND ON ANY THEORY OF LIABILITY, WHETHER IN 
+% CONTRACT, STRICT LIABILITY, OR TORT (INCLUDING NEGLIGENCE OR OTHERWISE) 
+% ARISING IN ANY WAY OUT OF THE USE OF THIS SOFTWARE, EVEN IF ADVISED OF THE 
+% POSSIBILITY OF SUCH DAMAGE.
+
+% plot the shaded area
+y = [y1; (y2-y1)]'; 
+ha = area(x, y);
+set(ha(1), 'FaceColor', 'none') % this makes the bottom area invisible
+set(ha, 'LineStyle', 'none')
+
+% plot the line edges
+hold on 
+hb = plot(x, y1, 'LineWidth', 1);
+hc = plot(x, y2, 'LineWidth', 1);
+hold off
+
+% set the line and area colors if they are specified
+switch length(varargin)
+    case 0
+    case 1
+        set(ha(2), 'FaceColor', varargin{1})
+    case 2
+        set(ha(2), 'FaceColor', varargin{1})
+        set(hb, 'Color', varargin{2})
+        set(hc, 'Color', varargin{2})
+    otherwise
+end
+
+% put the grid on top of the colored area
+set(gca, 'Layer', 'top')
+grid on

8/replication_package/20111351_data/functions/simul.m

@@ -0,0 +1,24 @@
+%%% Estimates figures from "Discretionary Tax Changes and the Macroeconomy: 
+%%% New Narrative Evidence from the United Kingdom" by James Cloyne, The American Economic Review.
+%%% Copyright J.S. Cloyne (2012)
+
+function [simulation]=simul(beta,P,Q,nvar,taxshock,taxlags,history,data)
+
+simulation = zeros(history,nvar); 
+simulation(1:Q,:) = data(1:Q,:);
+  
+trend = zeros(history,1);
+for kk = 2:history
+    trend(kk,:) = trend(kk-1,:) +1;
+end
+    
+m = Q;
+while m<history;
+    m=m+1;
+    endog_lags = [];
+    for j=1:P
+        endog_lags = [endog_lags,simulation(m-j,:)];
+    end
+simulation(m,:) = [1 trend(m) endog_lags taxshock(m) taxlags(m,:)]*beta;
+end;
+simulation = simulation(Q+1:end,:);

8/replication_package/20111351_data/functions/var_reg.m

@@ -0,0 +1,18 @@
+%%% Estimates figures from "Discretionary Tax Changes and the Macroeconomy: 
+%%% New Narrative Evidence from the United Kingdom" by James Cloyne, The American Economic Review.
+%%% Copyright J.S. Cloyne (2012)
+
+function [beta u]=var_reg(data,taxshock,taxlags,P,Q,nvar)
+% Lags
+X = lagmat(data,P,nvar);
+XX=X(Q-P+1:end,:);
+% Trend
+trend = zeros(size(XX,1),1);
+for i = 2:size(XX,1)
+    trend(i,:) = trend(i-1,:) +1;
+end
+
+XX= [ones(size(XX,1),1) trend XX taxshock(Q+1:end) taxlags(Q+1:end,:) ];
+YY= data(Q+1:end,:);
+beta=XX\YY;
+u = YY - XX*beta;

8/replication_package/LICENSE.txt

@@ -0,0 +1,3 @@
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+oid sha256:37a49d71e6e1b1158742b1570a97a4c72702d2ab372906053e6b073e25369cb4
+size 14974

8/should_reproduce.txt

@@ -0,0 +1,3 @@
+version https://git-lfs.github.com/spec/v1
+oid sha256:400df0d2e80ac7abacc695acec7c39b8158d5120217fc1ac6bf4455c031440da
+size 106