Fiscal trap Gabon economy case study
DOI:
https://doi.org/10.18559/rielf.2016.1.2Keywords:
fiscal trap, generalized moments method in system, growth Laffer’s curve, optimal tax rate, public deficitAbstract
The persistence of the economic and financial crisis present in Greece teaches that the combination of an increase in the tax rate with austerity in periods of recession creates a vicious circle where if connected decrease in tax revenues, reduced gross domestic product and increase public debt ratio on GDP. This mechanism is known as the fiscal trap. Thanks to the generalized moments method in system (MMG), we verified this hypothesis for the Gabonese economy.
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