<abstract xmlns="http://www.w3.org/1999/xhtml"><p> The aim of this paper is to identify the impacts of different taxes and expenditures on economic growth. The research is focused on 20 selected European Union Member States. These countries are equally divided into four groups based on their average tax burden as presented in the World Tax Index. A comparison of fiscal attributes among these groups is important for the analysis. Annual government finance data from the years 1995 to 2012 are used for an empirical study. The indicators observed are real GDP change, the composition and volume of total government expenditures, tax quotas of individual taxes and total budget balance. These indicators are used within an endogenous growth model together with capital stock and an approximation of human capital. A panel regression with fixed effects is used as an analytic tool. The main results are that an increase in social contributions, property, production and personal income tax quotas has an adverse effect on economic growth.</p></abstract>

The aim of this paper is to identify the impacts of different taxes and expenditures on economic growth. The research is focused on 20 selected European Union Member States. These countries are equally divided into four groups based on their average tax burden as presented in the World Tax Index. A comparison of fiscal attributes among these groups is important for the analysis. Annual government finance data from the years 1995 to 2012 are used for an empirical study. The indicators observed are real GDP change, the composition and volume of total government expenditures, tax quotas of individual taxes and total budget balance. These indicators are used within an endogenous growth model together with capital stock and an approximation of human capital. A panel regression with fixed effects is used as an analytic tool. The main results are that an increase in social contributions, property, production and personal income tax quotas has an adverse effect on economic growth.

Economic Growth and Budget Constraints: EU Countries Panel Data Analysis

Masaryk University, Lipová 41a, Brno, Czech Republic

Review of Economic Perspectives

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 License.

{"article-title":"Economic Growth and Budget Constraints: EU Countries Panel Data Analysis"}

The aim of this paper is to identify the impacts of different taxes and expenditures on economic growth. The research is focused on 20 selected European Union...

Economic Growth and Budget Constraints: EU Countries Panel Data Analysis

Published Online: Jun 28, 2016

Page range: 87 - 101

Received: Jul 16, 2015

Accepted: Nov 26, 2015

DOI: https://doi.org/10.1515/revecp-2016-0007

© by Petr Zimčík

This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 License.