Taxes and Growth in Europe

Georgios Karras and Davide Furceri

South-Eastern Europe Journal of Economics, 2009, vol. 7, issue 2, 181-204

Abstract: This paper investigates the effects of changes in taxes on economic growth. Using annual data from 1965 to 2003 for a panel of nineteen European economies, the results show that the effect of an increase in taxes on real GDP per capita is negative and persistent: an increase in the total tax rate (measured as the total tax ratio to GDP) by 1% of GDP has a long-run effect on real GDP per capita of -0.5% to -1%. The findings also imply that increases in social security contributions or taxes on goods and services have larger negative effects on per capita output than increases in income tax.

Keywords: Taxes; Economic Growth (search for similar items in EconPapers)
JEL-codes: E62 H30 (search for similar items in EconPapers)
Date: 2009
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (34)

Downloads: (external link)
http://www.asecu.gr/Seeje/issue13/KARRAS.pdf (application/pdf)

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:seb:journl:v:7:y:2009:i:2:p:181-204

Access Statistics for this article

More articles in South-Eastern Europe Journal of Economics from Association of Economic Universities of South and Eastern Europe and the Black Sea Region Contact information at EDIRC.
Bibliographic data for series maintained by Ms. Melina Petromelidou ().