Economic Growth and Budget Constraints: EU Countries Panel Data Analysis

• Authors: Petr Zimčík
• Languages of publication: EN

Abstracts

EN

The aim of this paper is to identify the impacts of different taxes and expenditures on economic growth. The research is focused on 20 selected European Union Member States. These countries are equally divided into four groups based on their average tax burden as presented in the World Tax Index. A comparison of fiscal attributes among these groups is important for the analysis. Annual government finance data from the years 1995 to 2012 are used for an empirical study. The indicators observed are real GDP change, the composition and volume of total government expenditures, tax quotas of individual taxes and total budget balance. These indicators are used within an endogenous growth model together with capital stock and an approximation of human capital. A panel regression with fixed effects is used as an analytic tool. The main results are that an increase in social contributions, property, production and personal income tax quotas has an adverse effect on economic growth.

Keywords

EN

Economic Growth; EU; Taxation; Government Expenditures; Panel Data

• Publisher: Sciendo
• Journal: Review of Economic Perspectives
• Year: 2016
• Volume: 16
• Issue: 2
• Pages: 87-101

Dates

published

2016-06-01

received

2015-07-16

accepted

2015-11-26

revised

2016-06-16

online

2016-06-28

Contributors

author

Petr Zimčík

• Masaryk University, Lipová 41a, Brno, Czech Republic

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Identifiers

DOI

10.1515/revecp-2016-0007