International evidence of tax smoothing in a panel of industrial countries

ASU Author/Contributor (non-ASU co-authors, if there are any, appear on document)
Mark Strazicich Ph.D., Professor (Creator)
Appalachian State University (ASU )
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Abstract: A panel of industrial countries is examined for evidence of `tax smoothing’. Tax smoothing results when governments minimize tax distortions over time. The model provides a positive theory of government debt and is due primarily to Barro. Unit root tests are performed in panel data to test the null hypothesis of nonstationary tax rates. Panel regressions are then undertaken to test the null hypothesis that tax rate changes are unpredictable and test for evidence of an alternative hypothesis. Political and economic variables are examined for their ability to predict tax rate changes. Overall, the results cannot reject the null hypotheses and support tax smoothing by national governments.

Additional Information

Strazicich, M.C. (2002). International Evidence of Tax Smoothing in a Panel of Industrial Countries. Applied Economics, 34(18): 2325-2331 (Dec 2002). Published by Taylor & Francis (ISSN: 0003-6846). DOI: 10.1080/00036840210143107.
Language: English
Date: 2002

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