The impact of sales tax on economic growth in the United States: an ARDL bounds testing approach

Figures & data

Table 1. Results for the bounds of the F-test

F(EG/STax): 7.9753*
	Lower I(0)	Upper I(1)
1% level	6.84	7.84
5% level	4.94	5.73
10% level	4.04	4.78

Source: Asymptotic critical values are obtained from Pesaran et al. (2001): Table CI(iii) Case III: Unrestricted intercept and no trend.

Note: *Significance at the level (α = 0.01).

Table 2. The long- and short-run ARDL relationships

The ARDL long-run relationship (depended variable EG):
Regressor	Coefficient	SE	T-Ratio[Probability]
STAX	−0.018963	0.0026169	−7.2464[0.000]
CONST	8.4708	0.57114	14.8314[0.000]
The ARDL short-run relationship or error-correction model (dependent variable dEG):
dSTAX	0.14109	0.032621	4.3253[0.000]
dCONST	6.2509	1.1187	5.5875[0.000]
ecm(−1)	−0.73793	0.11389	−6.4794[0.000]
List of additional temporary variables created:
dEG = EG-EG(−1)
dSTAX = STAX-STAX(−1)
dCONST = CONST – CONST(−1)
ecm = EG + 0.018963 × STAX − 8.4708 × CONST
R-squared	0.54443	R-bar-squared	0.51535
SE of regression	1.7243	F-stat. F(2,48)	28.0835[0.000]
Mean of dependent variable	−0.078498	SD of dependent variable	2.4768
Residual sum of squares	139.7354	Equation log-likelihood	−98.0680
AIC	−102.0680	Schwarz Bayesian criterion	−105.9316
DW-statistic	1.9058

Note: The results were calculated using the Microfit software developed by professor Pesaran, M. H. and Pesaran, B. @ Oxford University Press.

Fig. 1. CUSUM of recursive residuals

Fig. 2. CUSUMSQ of recursive residuals

Pesaran, M. H., Shin, Y. and Smith, R. J. (2001) Bounds testing approaches to the analysis of level relationships, Journal of Applied Econometrics, 16, 289–326. doi:10.1002/jae.616

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