About

Gabriel Chodorow-Reich is the George Fisher Baker Professor of Economics at Harvard. His research focuses on macroeconomics, finance, and labor markets.

Research topics

• Monetary economics
• Economics
• Finance
• Financial system
• Business
• Labour economics
• Macroeconomics
• Actuarial science

Selected publications

• The Neoclassical Theory of Firm Investment and Taxes: A Reassessment

  SSRN Electronic Journal · 2025-01-01

  preprintOpen access1st authorCorresponding
  PublisherDOI

• Comment

  NBER Macroeconomics Annual · 2025-07-01

  article1st authorCorresponding
  PublisherDOI

• The Neoclassical Theory of Firm Investment and Taxes: A Reassessment

  SSRN Electronic Journal · 2025-01-01

  articleOpen access1st authorCorresponding
  PublisherDOI

• The Neoclassical Theory of Firm Investment and Taxes: A Reassessment

  National Bureau of Economic Research · 2025-06-01

  reportOpen access1st authorCorresponding

  Economists have widely varying opinions of how corporate taxation affects aggregate investment, output, and wages.This disagreement reflects a 60-year history of misapplication of the neoclassical theory of investment to interpret empirical work and guide policy analysis.In this article I reconsider the accumulated evidence relating tax policy to firm investment through the lens of the neoclassical theory.Empirical work suggests a range for the firm-level, short-run semielasticity of the investment-to-capital ratio to the user cost of -0.25 to -0.75.The mid-point of this range translates into values for the elasticity of firm revenue to capital of between 0.22 and 0.35.The implied general equilibrium, long-run elasticity of capital to the user cost can differ substantially from leading policy models.The elasticity of the wage to the user cost ranges from -0.3 to -0.7, or from -0.1 to -0.2 for changes to the user cost in the C-corporate sector alone.In the relatively low-tax regime in the U.S. in 2024, the neoclassical contribution to higher output from higher capital cannot rationalize more than modest dynamic tax revenue offsets from further reductions in corporate taxation.

  PublisherDOI

• Lessons from the Biggest Business Tax Cut in US History

  National Bureau of Economic Research · 2024-07-01 · 5 citations

  reportOpen access1st authorCorresponding
  PublisherDOI

• Lessons from the Biggest Business Tax Cut in US History

  The Journal of Economic Perspectives · 2024-08-01 · 15 citations

  articleOpen access1st authorCorresponding

  We assess the business provisions of the 2017 Tax Cuts and Jobs Act, the biggest corporate tax cut in US history. We draw five lessons. First, corporate tax revenue fell by 40 percent due to the lower rate and more generous expensing. Second, firms with larger declines in their effective tax wedge increased investment relatively more. In aggregate, we suggest a loose consensus from the literature that total tangible corporate investment increased by 11 percent. Third, the business tax provisions increased economic growth and wages by less than advertised by the Act’s proponents, with long-run GDP higher by less than 1 percent and labor income by less than $1,000 per employee. Fourth, provisions that increase foreign investment by US-based multinationals also boost their domestic operations. Fifth, some of the expired and expiring provisions, such as accelerated depreciation, generate more investment per dollar of tax revenue than others.

  PublisherOA PDFDOI

• Lessons from the Biggest Business Tax Cut in Us History

  SSRN Electronic Journal · 2024-01-01

  articleOpen access1st authorCorresponding
  PublisherDOI

• Tax Policy and Investment in a Global Economy

  SSRN Electronic Journal · 2024-01-01

  articleOpen access1st authorCorresponding
  PublisherDOI

• Tax Policy and Investment in a Global Economy

  National Bureau of Economic Research · 2024-03-01 · 28 citations

  reportOpen access1st authorCorresponding

  We evaluate the 2017 Tax Cuts and Jobs Act.Combining reduced-form estimates from tax data with a global investment model, we estimate responses, identify parameters, and conduct counterfactuals.Domestic investment of firms with the mean tax change increases 20% versus a no-change baseline.Due to novel foreign incentives, foreign capital of U.S. multinationals rises substantially.These incentives also boost domestic investment, indicating complementarity between domestic and foreign capital.In the model, the long-run effect on domestic capital in general equilibrium is 7% and the tax revenue feedback from growth offsets only 2p.p. of the direct cost of 41% of pre-TCJA corporate revenue.

  PublisherDOI

• Propagation of Shocks in Networks: Identification and Applications

  SSRN Electronic Journal · 2024-01-01

  preprintOpen access1st authorCorresponding
  PublisherDOI

Frequent coauthors

• Loukas Karabarbounis

  Federal Reserve Bank of Minneapolis

  51 shared

• Alp Simsek

  Yale University

  13 shared

• Rohan Kekre

  12 shared

• Plamen Nenov

  10 shared

• John Coglianese

  Federal Reserve

  10 shared

• Johannes Wieland

  8 shared

• Timothy McQuade

  University of California, Berkeley

  7 shared

• Barry Bosworth

  Brookings Institution

  6 shared

Education

• B.A., Economics

  Harvard University

  2002

• M.A., Economics

  Harvard University

  2003

• Ph.D., Economics

  Harvard University

  2008