During the 1980s the OECD countries experienced divergent trends in taxation. In some countries governments took to cutting tax rates, especially income tax rates, influenced perhaps by the supply-side economists. In other countries, tax rates continued to rise as had generally been the case...

This paper considers panel data regression models with weakly exogenous or endogenous regressors and residuals generated by a multi-factor error structure. In this case, the standard dynamic panel estimators fail to provide consistent estimates of the parameters. We propose a new estimation...