Fiscal policy and private investment : Latin America in a comparative perspective
By: CABALLERO U., Emilio
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Contributor(s): LÓPEZ G., Julio.
Material type: 
ArticlePublisher: São Paulo : Editora 34, abr./jun. 2012Subject(s): Política Fiscal | Política Econômica | Macroeconomia | Teoria Econômica | América LatinaRevista de Economia Política = Brazilian Journal of Political Economy 32, 2, p. 241-259Abstract: The main objective of the paper is to assess the impact of fiscal variables on private investment comparing some Latin-American economies to other advanced ones. For such purposes, the authors carry out an econometric analysis for the period 1990-2008. They make use of two dynamic panel models in which they group countries with similar characteristics and development levels. In one of them, they include Mexico, Brazil, Chile, Colombia and Uruguay; whereas in the second one the countries accounted for are the U.S., Canada, Spain, Korea, Ireland and Japan. They specify in both models an investment function using as arguments a wide range of variables, including those related with fiscal policy. From their results the authors infer that goverments can, with higher taxes. In Latin America, where income concentration is enormous, a proposal to boost up the economy through higher government expenditure financed with a progressive income tax, is even more justified.
The main objective of the paper is to assess the impact of fiscal variables on private investment comparing some Latin-American economies to other advanced ones. For such purposes, the authors carry out an econometric analysis for the period 1990-2008. They make use of two dynamic panel models in which they group countries with similar characteristics and development levels. In one of them, they include Mexico, Brazil, Chile, Colombia and Uruguay; whereas in the second one the countries accounted for are the U.S., Canada, Spain, Korea, Ireland and Japan. They specify in both models an investment function using as arguments a wide range of variables, including those related with fiscal policy. From their results the authors infer that goverments can, with higher taxes. In Latin America, where income concentration is enormous, a proposal to boost up the economy through higher government expenditure financed with a progressive income tax, is even more justified.
v. 32, n. 2(127)
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