Authors:
Vito Tanzi Former Director of the Fiscal Affairs Department of the International Monetary Fund (IMF), Washington D.C., USA and Honorary President of the International Institute of Public Finance (IIPF), Munich, Germany

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Hüseyin Şen Public Finance Department, Faculty of Political Sciences, Ankara University, Ankara, Turkey

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Ayşe Kaya Public Finance Department, Faculty of Economics and Administrative Sciences, İzmir Kâtip Çelebi University, İzmir, Turkey

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Abstract

This article provides an agnostic, historical review of taxation and economic growth. It critically evaluates how the relationship between the two has evolved throughout modern history. After an introduction that provides a general overview of the relationship between taxation and growth, the article first discusses the positive role of taxes in promoting economic development in the pre-war and post-war periods of the 1940s. It then critically comments on Solow's neoclassical growth theory and explains the experience of stagflation faced by many advanced countries in the 1970s and its implications for tax theory. New growth theories that attribute an important role in economic growth to government policy in general and tax policy in particular are then discussed. This is followed by a rounded five-point assessment of the impact of taxes on growth. The article ends with a general conclusion.

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Senior editors

Editors-in-Chief: István P. Székely, Dóra Győrffy

Editor(s): Judit Kálmán

Associate Editors

  • Péter Benczúr, Joint Joint Research Center, European Commission
  • Dóra Benedek, International Monetary Fund
  • Balázs Égert, OECD
  • Dániel Prinz, World Bank
  • Rok Spruk, University of Ljubljana, School of Economics and Business, Slovenia

Editorial Board

  • Anders Åslund, Georgetown University and Advisory Council of CASE, USA
  • István Benczes, Corvinus University of Budapest, Hungary 
  • Agnieszka Chłoń-Domińczak, SGH Warsaw School of Economics, Poland
  • Fabrizio Coricelli, University of Siena, Italy
  • László Csaba, Corvinus University of Budapest, Hungary and Central European University, Austria
  • Beáta Farkas, Faculty of Economics and Business Administration, University of Szeged, Hungary
  • Péter Halmai, Budapest University of Technology and Economics, and National University of Public Service, Hungary
  • Martin Kahanec, Central European University, Austria
  • Michael Landesmann, The Vienna Institute for International Economic Studies (WIIW), Austria
  • Péter Mihályi, Corvinus University of Budapest, Hungary
  • Debora Revoltella, European Investment Bank

Corvinus University of Budapest
Department of Economics
Fővám tér 8 Budapest, H-1093, Hungary
E-mail: judit.kalman@uni-corvinus.hu

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Acta Oeconomica
Language English
Size B5
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1966
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per Year
4
Founder Magyar Tudományos Akadémia
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