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Growth and volatility of tax revenues in Latin America

  • Fricke, Hans
  • Süssmuth, Bernd
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    Against the backdrop of high macroeconomic instability and the need to meet the demands of public spending, we analyze the trade-off between growth and volatility of tax revenues in Latin America. Short-run and long-run elasticities for a sample of eleven economies are estimated accounting for state-dependent asymmetric reactions. Controlling for composition of revenue sources and other idiosyncrasies, we find revenues above (below) its long-run equilibrium to react stronger (weaker) to business cycle dynamics. Our detailed elasticity estimates can give some orientation on how to stably reach higher tax levels on the way to develop an adequate internal tax system.

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    File URL: http://econstor.eu/bitstream/10419/81934/1/767785878.pdf
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    Paper provided by University of Leipzig, Faculty of Economics and Management Science in its series Working Papers with number 124.

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    Date of creation: 2013
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    Handle: RePEc:zbw:leiwps:124
    Contact details of provider: Postal: Marschnerstraße 31, 04109 Leipzig
    Web page: http://www.wifa.uni-leipzig.de/en/dekanat.html

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