Do Taxes Matter for Long-Run Growth? : Harberger's Superneutrality Conjecture /

Harberger's superneutrality conjecture contends that, although in theory the mix of direct and indirect taxes affects investment and growth, in practice growth effects of taxation are negligible. This paper provides evidence in support of this view by testing the predictions of endogenous growt...

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Autor principal: Asea, Patrick
Altres autors: Mendoza, Enrique, Milesi-Ferretti, Gian
Format: Revista
Idioma:English
Publicat: Washington, D.C. : International Monetary Fund, 1995.
Col·lecció:IMF Working Papers; Working Paper ; No. 1995/079
Accés en línia:Full text available on IMF
Descripció
Sumari:Harberger's superneutrality conjecture contends that, although in theory the mix of direct and indirect taxes affects investment and growth, in practice growth effects of taxation are negligible. This paper provides evidence in support of this view by testing the predictions of endogenous growth models driven by human capital accumulation. The theoretical analysis highlights implications of different taxes for growth and investment in these models. The empirical work is based on cross-country regressions and numerical simulations, using a new methodology for estimating aggregate effective tax rates. Results show significant investment effects from income and consumption taxes that are consistent with small growth effects. The results are robust to the introduction of other growth determinants.
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Descripció física:1 online resource (42 pages)
Format:Mode of access: Internet
ISSN:1018-5941
Accés:Electronic access restricted to authorized BRAC University faculty, staff and students