The Double Trap: Taxes and Subsidies as Determinants of Economic Growth and the End of the Downward Growth Spiral in Greece

Christos K. Tsenes and Dimitrios Thomakos
Additional contact information
Christos K. Tsenes: Eurobank Asset Management M.F.M.C.

Chapter 14 in Taxation in Crisis, 2017, pp 359-387 from Palgrave Macmillan

Abstract: Abstract We empirically examine the potential relationship between the size of the government in Greece—as approached by indirect taxes and subsidies—and economic growth. Our results suggest that a negative relationship does exist between taxes and growth, confirming a large part of the existing literature. We estimate a variety of models that illustrate how and when policymakers can take action in order to boost growth and end the downward spiral in the Greek economy. Tax-based fiscal action arises as the most efficient strategy, targeting the disposable income of the Greek household by reducing taxation and boosting employment. Most importantly, according to our analysis, the government’s budget constraints are not threatened and fiscal prudence is not to be derailed, a prerequisite under the signed memoranda of understanding and bailout programs.

Date: 2017
References: Add references at CitEc
Citations: View citations in EconPapers (1)

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

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:pal:pmschp:978-3-319-65310-5_14

Ordering information: This item can be ordered from
http://www.palgrave.com/9783319653105

DOI: 10.1007/978-3-319-65310-5_14

Access Statistics for this chapter

More chapters in Palgrave Macmillan Studies in Banking and Financial Institutions from Palgrave Macmillan
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().