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A Time Series Investigation Of The Impact Of Corporate And Personal Current Taxes On Economic Growth In The U.S., Peter J. Saunders
A Time Series Investigation Of The Impact Of Corporate And Personal Current Taxes On Economic Growth In The U.S., Peter J. Saunders
Economics Faculty Scholarship
This paper investigates the impact of corporate income taxes and personal current taxes on economic growth. Time-series tests analyzing the relationship between corporate taxes and nonresidential investment are implemented. Also tests of the impact of personal current taxes on the labor supply, approximated by the average weekly overtime hours in manufacturing, are undertaken. These tests include cointegration, vector error correction (VEC) estimation, and Granger causality testing of the relevant time-series data. Cointegration tests indicate the existence of a stable long run relationship between corporate taxes and nonresidential investment. Further investigation of this relationship is undertaken within the VEC testing framework. …