How Taxes and Spending on Education Influence Economic Growth in Poland
This paper investigates the relationship between economic growth in Poland and four types of taxes and human capital investment. We primarily rely on an exogenous growth model that merges the Mankiw-Romer-Weil model, augmented with learning-by-doing and spillover-effects, with selected elements from...
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| Format: | Article |
| Language: | English |
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VIZJA University
2014-09-01
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| Series: | Contemporary Economics |
| Online Access: | http://ce.vizja.pl/en/download-pdf/id/376 |
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| author | Michał Konopczyński |
| author_facet | Michał Konopczyński |
| author_sort | Michał Konopczyński |
| collection | DOAJ |
| description | This paper investigates the relationship between economic growth in Poland and four types of taxes and human capital investment. We primarily rely on an exogenous growth model that merges the Mankiw-Romer-Weil model, augmented with learning-by-doing and spillover-effects, with selected elements from the literature on optimal taxation. We demonstrate that in the period 2000-2011, economic growth in Poland was primarily due to a rapid increase in the human capital stock (at a rate of 5% per annum) and only secondarily due to the accumulation of productive capital (2.7% annually). Simulations of tax cuts suggest that income taxes and consumption taxes restrict economic growth equally heavily. Simultaneously reducing all tax rates by 5 percentage points (pp) in Poland should increase annual GDP growth by approximately 0.4 pp. Increasing spending on education by 1 pp of GDP would increase the growth rate by approximately 0.3 pp. |
| format | Article |
| id | doaj-art-a4b2b92a2cd04ae98b6b80e5233ca5f8 |
| institution | OA Journals |
| issn | 2084-0845 |
| language | English |
| publishDate | 2014-09-01 |
| publisher | VIZJA University |
| record_format | Article |
| series | Contemporary Economics |
| spelling | doaj-art-a4b2b92a2cd04ae98b6b80e5233ca5f82025-08-20T02:00:37ZengVIZJA UniversityContemporary Economics2084-08452014-09-0183110510.5709/ce.1897-9254.149376How Taxes and Spending on Education Influence Economic Growth in PolandMichał Konopczyński0-This paper investigates the relationship between economic growth in Poland and four types of taxes and human capital investment. We primarily rely on an exogenous growth model that merges the Mankiw-Romer-Weil model, augmented with learning-by-doing and spillover-effects, with selected elements from the literature on optimal taxation. We demonstrate that in the period 2000-2011, economic growth in Poland was primarily due to a rapid increase in the human capital stock (at a rate of 5% per annum) and only secondarily due to the accumulation of productive capital (2.7% annually). Simulations of tax cuts suggest that income taxes and consumption taxes restrict economic growth equally heavily. Simultaneously reducing all tax rates by 5 percentage points (pp) in Poland should increase annual GDP growth by approximately 0.4 pp. Increasing spending on education by 1 pp of GDP would increase the growth rate by approximately 0.3 pp.http://ce.vizja.pl/en/download-pdf/id/376 |
| spellingShingle | Michał Konopczyński How Taxes and Spending on Education Influence Economic Growth in Poland Contemporary Economics |
| title | How Taxes and Spending on Education Influence Economic Growth in Poland |
| title_full | How Taxes and Spending on Education Influence Economic Growth in Poland |
| title_fullStr | How Taxes and Spending on Education Influence Economic Growth in Poland |
| title_full_unstemmed | How Taxes and Spending on Education Influence Economic Growth in Poland |
| title_short | How Taxes and Spending on Education Influence Economic Growth in Poland |
| title_sort | how taxes and spending on education influence economic growth in poland |
| url | http://ce.vizja.pl/en/download-pdf/id/376 |
| work_keys_str_mv | AT michałkonopczynski howtaxesandspendingoneducationinfluenceeconomicgrowthinpoland |