Tax policy cyclicality and financial development

Christos Chrysanthakopoulos and Athanasios Tagkalakis

Economics and Business Letters, 2024, vol. 13, issue 1, 48-57

Abstract: This paper adds to the existing literature by examining the macroeconomic, political and institutional determinants of tax policy cyclicality conditional on financial development. We find that an increase in trade and financial openness leads to pro-cyclical VAT and counter-cyclical CIT rate response in high financially developed economies, while an increase in financial openness is associated with counter-cyclical VAT and PIT responses when the levels of financial development are low. A high public debt ratio leads to a counter-cyclical VAT rate response in economies with low financial development. Political power and fiscal institutions are factors that affect the tax policy cyclicality only in less financially developed economies.

Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://reunido.uniovi.es/index.php/EBL/article/view/19832 (text/html)

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:ove:journl:aid:19832

Access Statistics for this article

Economics and Business Letters is currently edited by Francisco J. Delgado

More articles in Economics and Business Letters from Oviedo University Press Contact information at EDIRC.
Bibliographic data for series maintained by Francisco J. Delgado ().