Economics Research

Analysis of The Effect of Taxes on The Relationship between Financial Markets and Economical Growth

Document Type : Research Paper

Authors

Kamran Mani 1
Jamshid Pajuyan 2
Teymor Mohammadi 3

1 Assistant Professor, Payame Noor University

2 Professor, Faculty of Economics, Allameh Tababtabai University

3 Assistant Professor, Faculty of Economics, Allameh Tabataba'i University

Abstract
The relationship between financial markets and the economic growth is a subject that
has obviously been observed by many economists since the lifetime of Joseph Schumpeter.
There have been various analyses and opinions on the development of financial markets and
their effects on economic growth, and various conclusions have been achieved through
experimental studies.
 Some theoreticians view religious and cultural condition of countries as the factors of
satisfactory effects on economical growth. Others believe bureaucracy and political
establishment to be the main causes of such growth, while another group believes that the
economic policy and strategies of each country play roles. The present article emphasizes
the effect of taxes on the relationship between financial markets and economic growth in a
model of endogenous growth. This effectiveness will be analyzed for period of (1992-2008).
In this analysis, the study of panel data of more than 65 countries in the world signifies that
taxes have negative effects and the development of commercial interactions has positive
effects on the relationship between financial markets and economic growth. of Course,
empirical findings of the study do not indicate significant relationship between taxes,
financial markets and economic growth in the middle east countries.

Keywords

Economic Growth
Development of Financial Markets
Taxes

  • Receive Date 30 June 2008
  • Revise Date 30 April 2009
  • Accept Date 27 October 2009

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