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Articles

Vol. 5 No. 2 (2020)

Optimal Tax Rate and Economic Growth : an Empirical Application to the Case of Lebanon

  • Rosette Ghossoub Sayegh
  • Nisrine Hamdan Saade
Submitted
30 December 2020
Published
30-12-2020

Abstract

Many studies highlight the significant impact of fiscal policy on the economic growth rate, in countries with a precarious financial and economic situation, similar to the Lebanese case. An empirical study, covering the period 1971-2017, is conducted in this paper, to determine the optimal tax burden that maximizes the economic growth rate in Lebanon. A non-linear relationship between the tax burden and economic growth is examined, using the Scully static model Scully (1996, 2003). Looking at the country ' s periods of political conflict and economic instability, the econometric model estimates lead to an optimal tax burden of 20.62%.(original abstract)

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