The Nexus among Domestic Investment, Taxation, and Economic Growth in Germany: Cointegration and Vector Error Correction Model Analysis

Sayef Bakari, Ali Ahmadi and Sofien Tiba

MPRA Paper from University Library of Munich, Germany

Abstract: The development of endogenous growth theory has opened an avenue through which the effects of taxation on economic growth can be explored. Indeed, several empirical studies have examined the effect of many criteria, typically measured as domestic investment, on economic growth. This study reviews the theoretical and empirical evidence to assess whether a consensus arises as to how taxation affects the rate of economic growth. It is shown that the theoretical models isolate several channels through which taxation can affect growth and that these effects may be very. Our empirical facts record that both taxation of corporate and domestic investment positively influence economic growth, as well as, economic growth can affect taxation.

Keywords: Taxation; Domestic Investment; Economic Growth; Germany; VECM (search for similar items in EconPapers)
JEL-codes: E22 E62 H2 O47 O52 (search for similar items in EconPapers)
Date: 2019
New Economics Papers: this item is included in nep-mac
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Citations: View citations in EconPapers (1)

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Related works:
Journal Article: The Nexus among Domestic Investment, Taxation, and Economic Growth in Germany: Cointegration and Vector Error Correction Model Analysis (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:96655

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