Recent aggregate tests of the impact of taxes on long-run growth rates in the OECD countries remain vulnerable to two important criticisms. First, they typically use 'an aggregate average rate, or constructed marginal rate, that probably does not affect the rate that any particular economic...

Growth models contain strong predictions regarding the effect of fiscal policy on the steady state growth path. Fiscal policies have no effect on the steady state growth rate in the neoclassical model whereas fiscal policy does feature in the steady state of endogenous growth models. The number...