نوع مقاله: مقاله پژوهشی

نویسندگان

1 دانشگاه آزاد اسلامی، واحد بیضا، گروه اقتصاد، فارس، ایران

2 دانشگاه شهید چمران اهواز، گروه اقتصاد، اهواز، ایران

چکیده

The present paper examines the mitigating effect of monetary and fiscal policies on the “Growth Laffer curve” (GLC) using a panel data of 38 high income countries over the period 2003-2012. Adopting generalised method of moments (GMM) estimators, the paper finds evidence substantiating the presence of an inverted-U GLC. Moreover, the evidence suggests that the GLC shifts downward by employing expansionary monetary and fiscal policies and that the tax rate turning point beyond which economic growth decline is higher in countries with higher level of debt-to-GDP ratio and money supply. These results are robust to addition of alternative controlled variables in the GLC specification. Our results strengthen the case for heterogeneous GLC across countries. As an implication, a government may enhance the efficiency within the “fiscal space” by either raising the productivity of public spending or cutting fiscal debt. Moreover, using money as a financing instrument should be carefully supervised due to its impact in generating large inflation rates and distorting capital accumulation and economic growth.

کلیدواژه‌ها

عنوان مقاله [English]

Monetary and fiscal policies and the Growth Laffer Curve: panel data evidences

نویسندگان [English]

  • Roohollah Zare 1
  • Seyed Aziz Arman 2

1 Department of economics, Beyza branch, Islamic Azad University, Beyza, Iran

2 Department of Economics, Faculty of Economics and Social Sciences, Shahid Chamran University, Ahvaz, Iran

چکیده [English]

The present paper examines the mitigating effect of monetary and fiscal policies on the “Growth Laffer curve” (GLC) using a panel data of 38 high income countries over the period 2003-2012. Adopting generalised method of moments (GMM) estimators, the paper finds evidence substantiating the presence of an inverted-U GLC. Moreover, the evidence suggests that the GLC shifts downward by employing expansionary monetary and fiscal policies and that the tax rate turning point beyond which economic growth decline is higher in countries with higher level of debt-to-GDP ratio and money supply. These results are robust to addition of alternative controlled variables in the GLC specification. Our results strengthen the case for heterogeneous GLC across countries. As an implication, a government may enhance the efficiency within the “fiscal space” by either raising the productivity of public spending or cutting fiscal debt. Moreover, using money as a financing instrument should be carefully supervised due to its impact in generating large inflation rates and distorting capital accumulation and economic growth.

کلیدواژه‌ها [English]

  • Growth Laffer curve
  • taxes
  • Monetary policy
  • Fiscal policy
  • GMM

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