A VAR Analysis of the Connection between Taxation and Economic Growth. Case Study: Romania

Moraru Camelia (), Popovici Norina () and Ioni?ã Roxana ()
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Moraru Camelia: Academy of Economic Studies, Bucharest
Popovici Norina: „Ovidius” University, Faculty of Economic Sciences, Constanta
Ioni?ã Roxana: "Dimitrie Cantemir" Christian University, Constanta

Ovidius University Annals, Economic Sciences Series, 2015, vol. XV, issue 1, 831-835

Abstract: How can changes in the tax level influence economic activity? The simple correlation between taxation and economic activity has shown that when economic activity increases faster, then tax revenues grow more quickly, but this correlation does not reflect the positive effect of increased taxes on production. A number of studies that have examined the effects of taxes on economic growth and most of them have shown negative effects of taxation on economic growth. This paper examines the relationship between taxation, expressed as a share of tax revenues in GDP and growth, expressed as the rate of real GDP growth in Romania, during 2006-2012, using the VAR model.

Keywords: economic growth; fiscal policy; taxation; VAR analysis (search for similar items in EconPapers)
JEL-codes: E62 H21 O40 (search for similar items in EconPapers)
Date: 2015
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