How does Brazilian private investment respond to increases in the gross tax burden? An econometric investigation

Cláudio H. dos Santos () and Manoel Carlos de Castro Pires ()

Brazilian Journal of Political Economy, 2009, vol. 29, issue 3, 213-231

Abstract: This article aims to offer three contributions to the debate on the recent performance of the Brazilian economy. First, it presents approximate quarterly figures for the Brazilian private investment beginning in 1995. Second, it presents estimates of the Brazilian “investment function” which are robust to the presence of structural breaks. Third, it discusses the sensitivity of private investment to increases in the gross aggregate tax rate. Estimates based on national accounting data prior to march 2007 seem to indicate that an increase of 1% of GDP in the tax rate is associated with a reduction of 1% in private investment. JEL Classification: C22; C82; E22.

Keywords: Brazilian private investment; Brazilian aggregate tax rate; Cointegration analysis with structural breaks (search for similar items in EconPapers)
Date: 2009
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Persistent link: https://EconPapers.repec.org/RePEc:ekm:repojs:v:29:y:2009:i:3:p:213-231:id:494

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