The Macroeconomic Effects of a Switch from Direct to Indirect Taxes: An Empirical Assessment

Jakob Madsen and D Damania

Scottish Journal of Political Economy, 1996, vol. 43, issue 5, 566-78

Abstract: This paper investigates the macroeconomic effects of switching the tax burden from direct to indirect taxes in an empirical model based on twenty-two OECD countries. The Engle-Yoo (1989) three-step procedure is employed to estimate both the short- and long-run effects of such a tax switch. The results reveal that a switch from direct to indirect taxes is likely to generate efficiency gains in the short run which lead to higher levels of aggregate output. However, for the majority of countries in the sample, the tax changes have no impact on the level of economic activity in the long run. Copyright 1996 by Scottish Economic Society.

Date: 1996
References: Add references at CitEc
Citations: View citations in EconPapers (6)

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bla:scotjp:v:43:y:1996:i:5:p:566-78

Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=0036-9292

Access Statistics for this article

Scottish Journal of Political Economy is currently edited by Tim Barmby, Andrew Hughes-Hallett and Campbell Leith

More articles in Scottish Journal of Political Economy from Scottish Economic Society Contact information at EDIRC.
Bibliographic data for series maintained by Wiley Content Delivery ().