Increasing Impact of Stock Market Performance on Government Tax Revenues

Kód výsledku v IS VaVaI

<a href="https://www.isvavai.cz/riv?ss=detail&h=RIV%2F00216224%3A14560%2F17%3A00099012" target="_blank" >RIV/00216224:14560/17:00099012 - isvavai.cz</a>

Výsledek na webu

<a href="https://www.knepublishing.com/index.php/Kne-Social/article/view/667/2021" target="_blank" >https://www.knepublishing.com/index.php/Kne-Social/article/view/667/2021</a>

DOI - Digital Object Identifier

<a href="http://dx.doi.org/10.18502/kss.v1i2.667" target="_blank" >10.18502/kss.v1i2.667</a>

Jazyk výsledku

angličtina

Název v původním jazyce

Increasing Impact of Stock Market Performance on Government Tax Revenues

Popis výsledku v původním jazyce

The aim of this paper is to investigate the relationship between fiscal policy, economic growth and stock market in the United States. This issue has gained importance in the last decade because the market has changed. A significance break has been detected which impacts the nature of the nexus between certain variables. The correlation between the tax revenues and the stock market has increased noticeably, encouraging the revision of the current approach to fiscal policy. This study examines relationship between three variables, namely real GDP, federal government current tax receipts and the stock market represented by the Wilshire 5000 Total Market Index. Quarterly data from 1971 to 2015 are used, divided into two subsets in the year 2000, because there is an obvious change in trend and volatility of the variables. The analysis uses ADF and KPSS unit root tests to find the order of the integration of the data. Subsequent analysis applies Johansen cointegration test, vector error correction model, Granger causality tests and variance decomposition analysis. The results demonstrate that the selected variables are cointegrated, and performance of the stock market significantly increases its influence on government tax revenues in the second period. The findings of this paper are significant for policy makers. Understanding how stock market development and economic growth influence tax revenues and vice versa is crucial for the efficient implementation of successful fiscal policy. Investors in the economy of the United States will be also able to benefit from these results which will help them to understand economic conditions and improve their investment decisions.

Název v anglickém jazyce

Increasing Impact of Stock Market Performance on Government Tax Revenues

Popis výsledku anglicky

The aim of this paper is to investigate the relationship between fiscal policy, economic growth and stock market in the United States. This issue has gained importance in the last decade because the market has changed. A significance break has been detected which impacts the nature of the nexus between certain variables. The correlation between the tax revenues and the stock market has increased noticeably, encouraging the revision of the current approach to fiscal policy. This study examines relationship between three variables, namely real GDP, federal government current tax receipts and the stock market represented by the Wilshire 5000 Total Market Index. Quarterly data from 1971 to 2015 are used, divided into two subsets in the year 2000, because there is an obvious change in trend and volatility of the variables. The analysis uses ADF and KPSS unit root tests to find the order of the integration of the data. Subsequent analysis applies Johansen cointegration test, vector error correction model, Granger causality tests and variance decomposition analysis. The results demonstrate that the selected variables are cointegrated, and performance of the stock market significantly increases its influence on government tax revenues in the second period. The findings of this paper are significant for policy makers. Understanding how stock market development and economic growth influence tax revenues and vice versa is crucial for the efficient implementation of successful fiscal policy. Investors in the economy of the United States will be also able to benefit from these results which will help them to understand economic conditions and improve their investment decisions.

Druh

D - Stať ve sborníku

CEP obor

—

OECD FORD obor

50200 - Economics and Business

Projekt

—

Návaznosti

S - Specificky vyzkum na vysokych skolach

Rok uplatnění

2017

Kód důvěrnosti údajů

S - Úplné a pravdivé údaje o projektu nepodléhají ochraně podle zvláštních právních předpisů

Název statě ve sborníku

ECONOMIES OF BALKAN AND EASTERN EUROPE COUNTRIES IN THE CHANGED WORLD (EBEEC)

ISBN

—

ISSN

2518-668X

e-ISSN

—

Počet stran výsledku

11

Strana od-do

333-343

Název nakladatele

KNOWLEDGE E

Místo vydání

DUBAI

Místo konání akce

Split, CROATIA

Datum konání akce

6. 5. 2016

Typ akce podle státní příslušnosti

WRD - Celosvětová akce

Kód UT WoS článku

000417433200025