LAFFER CURVE DECOMPOSED

• Authors: Hájek Jan , Šafr Karl , Rotscheld Jiří , Čadil Jan
• Languages of publication: EN

Abstracts

EN

The paper analyses the models of the Laffer curve addressed in the academic literature and strives to explain the effects which can exist in relation with the original curve and the one modified by other academicians. The effects are decomposed in a theoretical manner and statistically tested thereafter with a dataset covering the period 2000 – 2012 consisting of data for Belgium, Denmark, Finland, France, Ireland, Italy, Luxembourg, Germany, the Netherlands, Portugal, Austria, Greece, United Kingdom, Spain, Sweden, the Czech Republic, Estonia, Hungary, Norway, Poland, the Slovak Republic and Slovenia. The main value added of the paper lies in the outcomes of the cross-sectional panel data regression testing the model derived from the theoretical decomposition of the curve as well as graphical expression of the particular effects. Based on the result of the analysis only a few of the decomposed effects could have been observed mainly the originally anticipated negative correlation of tax base and tax rate, positive correlation of labour productivity and tax base or negative correlation of tax base and unemployment level. Other effects (grey economy, tax competition, government spending, etc.) were not proven.

Keywords

EN

LAFFER CURVE; MODIFICATIONS; PANEL DATA ANALYSIS

• Publisher: Institute of Slovak and World Economics and Institute for Forecasting, Slovak Academy of Sciences
• Journal: Ekonomický časopis (Journal of Economics)
• Year: 2021
• Volume: 69
• Issue: 3
• Pages: 306 – 326

Contributors

author

Hájek Jan

• University of Finance and Administration, Faculty of Law and Public Administration, Estonská 500, 101 00 Prague 10, Czech Republic

author

Šafr Karl

author

Rotscheld Jiří

author

Čadil Jan

Identifiers

DOI

https://doi.org/10.31577/ekoncas.2021.03.05