Private investment, government expenditure and tax burden in Latin America

  • Luis Felipe Brito-Gaona Unidad Académica de Ciencias Empresariales. Universidad Técnica de Machala, Ecuador.
  • Emma Iglesias Departamento de Economía, Universidad de A Coruña, España.

Abstract

This paper looks for empirical evidence to show if a very interventionist government stimulates or not private investment in Latin America. Using the same model as Caballero-Urdiales y López-Gallardo (2012), we extend their analysis from five Latin-American countries to all Latin America. The results from our estimated elasticities show evidence in support of three hypothesis: (1) that tax burden (taxes on income and consumption) has significant effects on privateinvestment; (2) that public investment has a crowding out effect with private investment; (3) and that in order to stimulate private investment, the government should have very little intervention.
Compartir
How to Cite
Brito-Gaona, L., & Iglesias, E. (2017). Private investment, government expenditure and tax burden in Latin America. Estudios de Economía, 44(2), 5-30. Retrieved from https://estudiosdeeconomia.uchile.cl/index.php/EDE/article/view/47521/49586
Section
Articles
Published
2017-10-22