The Nexus Between Tax Revenue, Economic Policy Uncertainty, and Economic Growth: Evidence from G7 Economies

ŞAKAR E., ŞAŞMAZ M. Ü., ÖZEN A.

Sustainability (Switzerland), cilt.17, sa.15, 2025 (SCI-Expanded, SSCI, Scopus) identifier

  • Yayın Türü: Makale / Tam Makale
  • Cilt numarası: 17 Sayı: 15
  • Basım Tarihi: 2025
  • Doi Numarası: 10.3390/su17156780
  • Dergi Adı: Sustainability (Switzerland)
  • Derginin Tarandığı İndeksler: Science Citation Index Expanded (SCI-EXPANDED), Social Sciences Citation Index (SSCI), Scopus, Aerospace Database, Agricultural & Environmental Science Database, CAB Abstracts, Communication Abstracts, Food Science & Technology Abstracts, Geobase, INSPEC, Metadex, Veterinary Science Database, Directory of Open Access Journals, Civil Engineering Abstracts
  • Anahtar Kelimeler: asymmetric bootstrap Granger causality, economic growth, economic policy uncertainty, fiscal sustainability, G7 countries, panel data analysis, tax revenue
  • Uşak Üniversitesi Adresli: Evet

Özet

Economic policy uncertainty is an important macroeconomic risk factor that can have direct effects on investment decisions, growth dynamics, and public finance. In particular, its potential impact on tax revenue is critical in terms of fiscal sustainability. This study investigates the Granger-causal relationship between economic policy uncertainty, total tax revenue, and economic growth in G7 economies over the 1997–2021 period, applying symmetric and asymmetric panel causality tests. The empirical findings revealed evidence of causality between economic policy uncertainty and tax revenue and between economic growth and economic policy uncertainty. In asymmetric analyses where the effects of positive and negative shocks were separated, the direction of causal relationships differed between countries. These results imply that asymmetric effects vary by country. Overall, the empirical findings suggest that enhancing transparency and predictability in tax systems could play a vital role in reducing economic policy uncertainty and thus positively affect tax revenue performance and fiscal resilience.