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Long and short-run tax buoyancies in small states

Author

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  • Jeetendra Khadan

    (Inter-American Development Bank)

Abstract

This paper uses a recently developed and updated tax revenue dataset to estimate long- and short-run tax buoyancies for a group of 36 small states for the period 1993-2017. The main findings suggest that while buoyancies for aggregate tax revenues are relatively high, the long-run buoyancy for indirect taxes—which accounts for most tax revenues—is relatively lower than the buoyancy for direct taxes. Also, short-run buoyancies were found to be relatively low for both tax categories. It was found that the magnitude of the long-run buoyancy declined from the pre-crisis period to the post-crisis period, while short-run tax buoyancies have improved.

Suggested Citation

  • Jeetendra Khadan, 2020. "Long and short-run tax buoyancies in small states," Economics Bulletin, AccessEcon, vol. 40(1), pages 821-827.
    • Handle: RePEc:ebl:ecbull:eb-19-00906
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    File URL: http://www.accessecon.com/Pubs/EB/2020/Volume40/EB-20-V40-I1-P69.pdf
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    References listed on IDEAS

    as
    1. M. Hashem Pesaran, 2021. "General diagnostic tests for cross-sectional dependence in panels," Empirical Economics, Springer, vol. 60(1), pages 13-50, January.
    2. Joakim Westerlund, 2007. "Testing for Error Correction in Panel Data," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 69(6), pages 709-748, December.
    3. Jeetendra Khadan & Amrita Deonarine, 2019. "Testing the Inter-temporal Budget Constraint for Small States," Economics Bulletin, AccessEcon, vol. 39(2), pages 1176-1183.
    4. Pesaran, M. Hashem & Smith, Ron, 1995. "Estimating long-run relationships from dynamic heterogeneous panels," Journal of Econometrics, Elsevier, vol. 68(1), pages 79-113, July.
    5. M. Hashem Pesaran, 2007. "A simple panel unit root test in the presence of cross-section dependence," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 22(2), pages 265-312.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    tax buoyancy; panel cointegration; small states; fiscal policy;
    All these keywords.

    JEL classification:

    • E6 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook
    • H2 - Public Economics - - Taxation, Subsidies, and Revenue

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