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Tax policy, investment decisions and economic growth


  • Manuel Bonucchi
  • Monica Ferrari
  • Stefania Tomasini
  • Tsvetomira Tsenova


This paper evaluates the impact of the taxation system on production factor costs, investment and economic activity. This is performed on the basis of detailed analysis of the Italian tax system and the production of own estimates of the user cost of capital to labour, which capture the contribution of tax rates, tax incentives and other underlying factors. The study identifies the link between user cost and investment in the context of a full econometric model of investment demand determinants that includes aggregate demand, expectations and uncertainty. Finally, the study evaluates the past contribution of taxation to investment and economic activity, and assesses the impact of future tax reform proposals.

Suggested Citation

  • Manuel Bonucchi & Monica Ferrari & Stefania Tomasini & Tsvetomira Tsenova, 2015. "Tax policy, investment decisions and economic growth," Revue de l'OFCE, Presses de Sciences-Po, vol. 0(5), pages 225-262.
  • Handle: RePEc:cai:reofsp:reof_141_0225

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    Cited by:

    1. Radu CIOBANU & Adriana Florina POPA & Daniela-Nicoleta SAHLIAN, 2023. "Analysis of the Decisive Factors of the VAT Gap," CECCAR Business Review, Body of Expert and Licensed Accountants of Romania (CECCAR), vol. 4(1), pages 50-57, January.
    2. Thomas Leoni & Margit Schratzenstaller, 2020. "Senkung der Lohnnebenkosten und Finanzierungsvarianten. Bisherige Erkenntnisse und internationale Reformbeispiele," WIFO Studies, WIFO, number 66851.
    3. Ernesto Zangari, 2020. "An economic assessment of the evolution of the corporate tax system in Italy," Temi di discussione (Economic working papers) 1291, Bank of Italy, Economic Research and International Relations Area.


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