On the effects of taxation on growth: an empirical assessment
We study the effects of taxation on the growth rate of the real per capita GDP in a sample of 21 OECD countries, over the period 1965–2010. To do this, we estimate a version of the model proposed by Mankiw, Romer and Weil [(1992) Quarterly Journal of Economics 107, 407–437.] augmented to consider bo...
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| Veröffentlicht in: | Macroeconomic dynamics 2023-07, Vol.27 (5), p.1289-1318 |
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| creator | Alfò, Marco |
| description | We study the effects of taxation on the growth rate of the real
per capita
GDP in a sample of 21 OECD countries, over the period 1965–2010. To do this, we estimate a version of the model proposed by Mankiw, Romer and Weil [(1992)
Quarterly Journal of Economics
107, 407–437.] augmented to consider both
direct
and
indirect
effects of taxation on investment share parameters. We employ a semi-parametric technique—namely, a Finite Mixture Model—which combines features from mixed effect models for panel data and cluster analysis methods to account for country-specific unobserved heterogeneity. Our results suggest that taxes have a negative impact on growth: in the baseline model, the coefficient estimates indicate that a 10% cut in personal income tax rate (respectively corporate income tax rate) may raise the GDP growth rate by 0.6% (respectively 0.3%). |
| doi_str_mv | 10.1017/S1365100522000219 |
| format | Article |
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per capita
GDP in a sample of 21 OECD countries, over the period 1965–2010. To do this, we estimate a version of the model proposed by Mankiw, Romer and Weil [(1992)
Quarterly Journal of Economics
107, 407–437.] augmented to consider both
direct
and
indirect
effects of taxation on investment share parameters. We employ a semi-parametric technique—namely, a Finite Mixture Model—which combines features from mixed effect models for panel data and cluster analysis methods to account for country-specific unobserved heterogeneity. Our results suggest that taxes have a negative impact on growth: in the baseline model, the coefficient estimates indicate that a 10% cut in personal income tax rate (respectively corporate income tax rate) may raise the GDP growth rate by 0.6% (respectively 0.3%).</description><identifier>ISSN: 1365-1005</identifier><identifier>EISSN: 1469-8056</identifier><identifier>DOI: 10.1017/S1365100522000219</identifier><language>eng</language><publisher>Cambridge: Cambridge University Press</publisher><subject>Corporate income tax ; Corporate taxes ; Economic development ; Economic growth ; Economic theory ; Expenditures ; GDP ; Gross Domestic Product ; Growth rate ; Macroeconomics ; Per capita ; Personal income ; Random variables ; Tax cuts ; Tax increases ; Tax rates ; Taxation</subject><ispartof>Macroeconomic dynamics, 2023-07, Vol.27 (5), p.1289-1318</ispartof><rights>The Author(s), 2022. Published by Cambridge University Press</rights><lds50>peer_reviewed</lds50><woscitedreferencessubscribed>false</woscitedreferencessubscribed><citedby>FETCH-LOGICAL-c293t-cc22b9e6c0688e81e4d6532701a30832d732b370c4342898e2dde1dee8a3d0f03</citedby><cites>FETCH-LOGICAL-c293t-cc22b9e6c0688e81e4d6532701a30832d732b370c4342898e2dde1dee8a3d0f03</cites></display><links><openurl>$$Topenurl_article</openurl><openurlfulltext>$$Topenurlfull_article</openurlfulltext><thumbnail>$$Tsyndetics_thumb_exl</thumbnail><link.rule.ids>314,780,784,27924,27925</link.rule.ids></links><search><creatorcontrib>Alfò, Marco</creatorcontrib><title>On the effects of taxation on growth: an empirical assessment</title><title>Macroeconomic dynamics</title><description>We study the effects of taxation on the growth rate of the real
per capita
GDP in a sample of 21 OECD countries, over the period 1965–2010. To do this, we estimate a version of the model proposed by Mankiw, Romer and Weil [(1992)
Quarterly Journal of Economics
107, 407–437.] augmented to consider both
direct
and
indirect
effects of taxation on investment share parameters. We employ a semi-parametric technique—namely, a Finite Mixture Model—which combines features from mixed effect models for panel data and cluster analysis methods to account for country-specific unobserved heterogeneity. Our results suggest that taxes have a negative impact on growth: in the baseline model, the coefficient estimates indicate that a 10% cut in personal income tax rate (respectively corporate income tax rate) may raise the GDP growth rate by 0.6% (respectively 0.3%).</description><subject>Corporate income tax</subject><subject>Corporate taxes</subject><subject>Economic development</subject><subject>Economic growth</subject><subject>Economic theory</subject><subject>Expenditures</subject><subject>GDP</subject><subject>Gross Domestic Product</subject><subject>Growth rate</subject><subject>Macroeconomics</subject><subject>Per capita</subject><subject>Personal income</subject><subject>Random variables</subject><subject>Tax cuts</subject><subject>Tax increases</subject><subject>Tax 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per capita
GDP in a sample of 21 OECD countries, over the period 1965–2010. To do this, we estimate a version of the model proposed by Mankiw, Romer and Weil [(1992)
Quarterly Journal of Economics
107, 407–437.] augmented to consider both
direct
and
indirect
effects of taxation on investment share parameters. We employ a semi-parametric technique—namely, a Finite Mixture Model—which combines features from mixed effect models for panel data and cluster analysis methods to account for country-specific unobserved heterogeneity. Our results suggest that taxes have a negative impact on growth: in the baseline model, the coefficient estimates indicate that a 10% cut in personal income tax rate (respectively corporate income tax rate) may raise the GDP growth rate by 0.6% (respectively 0.3%).</abstract><cop>Cambridge</cop><pub>Cambridge University Press</pub><doi>10.1017/S1365100522000219</doi><tpages>30</tpages></addata></record> |
| fulltext | fulltext |
| identifier | ISSN: 1365-1005 |
| ispartof | Macroeconomic dynamics, 2023-07, Vol.27 (5), p.1289-1318 |
| issn | 1365-1005 1469-8056 |
| language | eng |
| recordid | cdi_proquest_journals_2892358402 |
| source | Cambridge University Press Journals Complete |
| subjects | Corporate income tax Corporate taxes Economic development Economic growth Economic theory Expenditures GDP Gross Domestic Product Growth rate Macroeconomics Per capita Personal income Random variables Tax cuts Tax increases Tax rates Taxation |
| title | On the effects of taxation on growth: an empirical assessment |
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