Growth and Volatility of Tax Revenues in Latin America

Hans Fricke and Bernd Süssmuth

World Development, 2014, vol. 54, issue C, 114-138

Abstract: Against the backdrop of high macroeconomic instability and the need to meet the demands of public spending, we analyze the trade-off between growth and volatility of tax revenues in Latin America. Short-run and long-run elasticities for a sample of 11 economies are estimated accounting for state-dependent asymmetric reactions. Controlling for composition of revenue sources and other idiosyncrasies, we find revenues above (below) its long-run equilibrium to react stronger (weaker) to business cycle dynamics. Our detailed elasticity estimates can give some orientation on how to stably reach higher tax levels on the way to develop an adequate internal tax system.

Keywords: tax policy; developing countries; regime-dependent elasticity (search for similar items in EconPapers)
Date: 2014
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (22)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0305750X13001769
Full text for ScienceDirect subscribers only

Related works:
Working Paper: Growth and volatility of tax revenues in Latin America (2013)
Working Paper: Growth and Volatility of Tax Revenues in Latin America (2011)
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:eee:wdevel:v:54:y:2014:i:c:p:114-138

DOI: 10.1016/j.worlddev.2013.07.007

Access Statistics for this article

World Development is currently edited by O. T. Coomes

More articles in World Development from Elsevier
Bibliographic data for series maintained by Catherine Liu ().