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Taxes And Economic Growth In Romania. A Var Approach

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  • Mihai Ioan MutaÅŸcu
  • Dan Constantin DănuleÅ£iu

Abstract

The paper analyzes the relationship between taxes and economic growth in the case of Romania in the period January 1999 - March 2010, using an unrestricted Vector Autoregression Model (VAR) based on the rate of dynamic taxation's level and the rate of dynamic economic growth. The relationship is questioned in both directions, namely with reference to the manner in which taxes affect economic growth, but also in terms of the influence that economic growth exerts on taxes in the case of Romania for the mentioned period. The results show that tax policy in Romania cannot be taken to extremes, and should be very carefully implemented because a large amount of factors can influence the results

Suggested Citation

  • Mihai Ioan MutaÅŸcu & Dan Constantin DănuleÅ£iu, 2011. "Taxes And Economic Growth In Romania. A Var Approach," Annales Universitatis Apulensis Series Oeconomica, Faculty of Sciences, "1 Decembrie 1918" University, Alba Iulia, vol. 1(13), pages 1-10.
    • Handle: RePEc:alu:journl:v:1:y:2011:i:13:p:10
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    Cited by:

    1. Shahzad AHMAD* & Maqbool H. SIAL** & Nisar AHMAD***, 2018. "INDIRECT TAXES AND ECONOMIC GROWTH: An Empirical Analysis of Pakistan," Pakistan Journal of Applied Economics, Applied Economics Research Centre, vol. 28(1), pages 65-81.
    2. Rudra P. Pradhan & Mak B. Arvin & Mahendhiran S. Nair & John H. Hall, 2022. "The dynamics between financial market development, taxation propensity, and economic growth: a study of OECD and non-OECD countries," Quality & Quantity: International Journal of Methodology, Springer, vol. 56(3), pages 1503-1534, June.
    3. Wisdom Takumah & Bernard Njindan Iyke, 2017. "The links between economic growth and tax revenue in Ghana: an empirical investigation," International Journal of Sustainable Economy, Inderscience Enterprises Ltd, vol. 9(1), pages 34-55.
    4. Gulgun Cigdem & Merve Altaylar, 2021. "Nonlinear Relationship between Economic Growth and Tax Revenue in Turkey: Hidden Cointegration Approach," Istanbul Journal of Economics-Istanbul Iktisat Dergisi, Istanbul University, Faculty of Economics, vol. 71(1), pages 21-38, June.
    5. Ismail AMANI & Brahim BOUYACOUB, 2022. "Fiscal and monetary policy effects on economic growth in Romania (1990-2020)," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania - AGER, vol. 0(3(632), A), pages 197-206, Autumn.

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    More about this item

    Keywords

    tax; growth; VAR analysis; impulse functions; effects;
    All these keywords.

    JEL classification:

    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

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