The Elasticity and Stability of Tax Revenues: An Ampirical Analysis Based on Central Government Budget Classification

Abstract

In this study, elasticity of tax revenues is analyzed by using monthly data in Turkey. The sample covers the period from January 2007 to December 2012. The growth and stability of tax revenues are examined by means of two models. The first of these models is called revenue level model which measures the long run growth of tax revenues. The second one is regular change model that determines the cyclic changes of tax revenues in the short run. This model also evaluates the stability in the short run. According to the results, tax revenues are elastic in the long run and display unstable structure in the short run.