MANUFACTURING INVESTMENT AND TAXATION IN THE NORDIC COUNTRIES

The accumulation of fixed productive capital in the manufacturing indu stries of Denmark, Finland, Norway, and Sweden is analyzed for the per iod 1965-90. Particular attention is given to the effect of taxes on t his process. The following conclusions appear fairly robust across cou ntries: Cointegrating long-run relationships can be found within the f ramework of the neoclassical model. The error-correction estimations i ndicate that investment is relatively sensitive to economic shocks. Ta xes do not seem to have had significant effects on either long-run cap ital levels or the timing of investment.