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How does Brazilian private investment respond to increases in the gross tax burden? An econometric investigation

Author

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  • Cláudio H. dos Santos
  • Manoel Carlos de Castro Pires

Abstract

This article aims to offer three contributions to the debate on the recent performance of the Brazilian economy. First, it presents approximate quarterly figures for the Brazilian private investment beginning in 1995. Second, it presents estimates of the Brazilian “investment function” which are robust to the presence of structural breaks. Third, it discusses the sensitivity of private investment to increases in the gross aggregate tax rate. Estimates based on national accounting data prior to march 2007 seem to indicate that an increase of 1% of GDP in the tax rate is associated with a reduction of 1% in private investment. JEL Classification: C22; C82; E22.

Suggested Citation

  • Cláudio H. dos Santos & Manoel Carlos de Castro Pires, 2009. "How does Brazilian private investment respond to increases in the gross tax burden? An econometric investigation," Brazilian Journal of Political Economy, Center of Political Economy, vol. 29(3), pages 213-231.
    • Handle: RePEc:ekm:repojs:v:29:y:2009:i:3:p:213-231:id:494
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    More about this item

    Keywords

    Brazilian private investment; Brazilian aggregate tax rate; Cointegration analysis with structural breaks;
    All these keywords.

    JEL classification:

    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • C82 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Methodology for Collecting, Estimating, and Organizing Macroeconomic Data; Data Access
    • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; Capacity

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