Abstract

In the paper, the relationship between tax revenues and economic growth in 24 OECD countries is analyzed for the period 1980-2018. In the empirical analysis, the panel cointegration method proposed by Westerlund (2007) is used in accordance with the literature. According to the findings, there is a cointegration relationship between tax revenues and economic growth. Then, according to the coefficient obtained using the DOLSMG panel cointegration estimator proposed by Pedroni (2001), it is concluded that tax revenues have a positive effect on economic growth. When the results are evaluated on a cross-section basis, the coefficients of all countries except Sweden are statistically significant. Among these countries, only Greece's coefficient is negative. In summary, the tax structure favorably promotes economic growth in most of the countries analyzed.