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Testing a Simple Structural Model of Endogenous Growth

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  • Patrick Minford
  • David Meenagh
  • Jiang Wang

Abstract

The efect of taxation on growth is embodied in a model of a small open economy with endogenous growth. The structural model is estimated on post-war panel data for 76 countries and the bootstrap is used to produce the model’s sampling variation. Panel data regressions of growth on taxation do not reject this model but do reject a model with no tax effects.

Suggested Citation

  • Patrick Minford & David Meenagh & Jiang Wang, 2006. "Testing a Simple Structural Model of Endogenous Growth," CDMA Conference Paper Series 0606, Centre for Dynamic Macroeconomic Analysis.
    • Handle: RePEc:san:cdmacp:0606
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    File URL: https://www.st-andrews.ac.uk/CDMA/papers/cp0606.pdf
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    References listed on IDEAS

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    Cited by:

    1. Meenagh, David & Minford, Patrick & Nowell, Eric & Sofat, Prakriti, 2010. "Can a real business cycle model without price and wage stickiness explain UK real exchange rate behaviour?," Journal of International Money and Finance, Elsevier, vol. 29(6), pages 1131-1150, October.
    2. Davidson, James & Meenagh, David & Minford, Patrick & Wickens, Michael, 2010. "Why crises happen - nonstationary macroeconomics," Cardiff Economics Working Papers E2010/13, Cardiff University, Cardiff Business School, Economics Section.

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    More about this item

    Keywords

    endogenous growth; taxation; business regulation; bootstrap; model validation.;
    All these keywords.

    JEL classification:

    • H25 - Public Economics - - Taxation, Subsidies, and Revenue - - - Business Taxes and Subsidies
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
    • O50 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - General

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