The impact of tax structure on long-term economic growth – Theory and empirical experience in view of the Hungarian data

Abstract

The primary aim of economic policy is to achieve as great and as general welfare as possible. The only way to achieve the long-term growth of welfare is to ensure the intense but sustainable development of the economy. This is why it is a key issue to study economic growth. Most of the growth theory studies are prepared in this spirit, which leaves all aspects besides growth out of the scope of attention, while the aim of economic policy is to increase welfare. However, we think that this contradiction is only seeming, and it depends on the selection of the time horizon, as the level of consumption cannot be permanently detached from the level of output. It is probably starting out from this idea that the majority of researchers opt on the maximization of the growth rate of output rather than consumption (welfare).