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Effect of Average Tax Rates on Long-Run Economic Growth Rate in Turkey

Author

Listed:
  • Osman Cenk Kanca

    (Atatürk University)

  • Rahmi Yamak

    (Karadeniz Technical University)

Abstract

Although tax revenue is one of the important parameters in public sector, its relationship with economic growth has been discussed in fiscal economics theory for a long time. The purpose of this study is to determine whether tax rates affect the long-run economic growth rate both in short and long-run for the period of 1980-2015. In the study, bounds test approach of the ARDL model developed by Pesaran et al. (2001) was employed. The long-run economic growth rates were produced by three different filters. The main finding of the study is that there exists an U-shaped curve relationship between average tax rate and long-run economic growth rate for Turkey.

Suggested Citation

  • Osman Cenk Kanca & Rahmi Yamak, 2018. "Effect of Average Tax Rates on Long-Run Economic Growth Rate in Turkey," Acta Universitatis Danubius. OEconomica, Danubius University of Galati, issue 14(5), pages 286-298, OCTOBER.
    • Handle: RePEc:dug:actaec:y:2018:i:5:p:286-298
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    References listed on IDEAS

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