Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/200395
Authors: 
Luo, Weijie
Year of Publication: 
2019
Series/Report no.: 
Economics Discussion Papers No. 2019-43
Abstract: 
This paper analyzes the impact of the composition of taxes on economic growth using a panel of OECD countries. In contrast to Kneller et al. (Fiscal policy and growth: evidence from OECD countries, 1999), over 1980-2005 distortionary taxation did not reduce growth, while an increase in non-distortionary taxation had a negative association with growth. When the data are extended to the great recession and its recovery period (1980−2015), distortionary taxation significantly reduces growth as originally conjectured, but the negative effect of non-distortionary taxation survives. This paper argues that distortions from expenditure taxes in recent years can be accounted for by a combination of an exploding increased debt/GDP and globalization.
Subjects: 
distortionary taxation
non-distortionary taxation
growth
JEL: 
H20
E62
O40
Creative Commons License: 
https://creativecommons.org/licenses/by/4.0/
Document Type: 
Working Paper

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