Non-linear effects of taxation on growth

Nir Jaimovich and Sergio Rebelo ()

No 2013-02, FRB Atlanta CQER Working Paper from Federal Reserve Bank of Atlanta

Abstract: We study a model in which the effects of taxation on growth are highly non-linear. Marginal increases in tax rates have a small growth impact when tax rates are low or moderate. When tax rates are high, further tax hikes have a large, negative impact on growth performance. We argue that this non-linearity is consistent with the empirical evidence on the effect of taxation and other disincentives to investment and innovation on economic growth.

Date: 2013
New Economics Papers: this item is included in nep-acc, nep-fdg and nep-pbe
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Citations: View citations in EconPapers (5)

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Related works:
Journal Article: Nonlinear Effects of Taxation on Growth (2017)
Working Paper: Non-linear Effects of Taxation on Growth (2012)
Working Paper: Non-linear Effects of Taxation on Growth (2012)
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