Effect of Average Tax Rates on Long-Run Economic Growth Rate in Turkey
Effect of Average Tax Rates on Long-Run Economic Growth Rate in Turkey

Summary/Abstract: Although tax revenue is one of the important parameters in public sector, its relationship with economic growth has been discussed in fiscal economics theory for a long time. The purpose of this study is to determine whether tax rates affect the long-run economic growth rate both in short and long-run for the period of 1980-2015. In the study, bounds test approach of the ARDL model developed by Pesaran et al. (2001) was employed. The long-run economic growth rates were produced by three different filters. The main finding of the study is that there exists an U-shaped curve relationship between average tax rate and long-run economic growth rate for Turkey.

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