GDP Per Capita Variability in Emerging Economies and Scale Effect of Inflation-Tax Burden

Abstract

This paper explores the variability of the Gross Domestic Product (GDP) per capita in emerging economies and the impact of inflation-tax burden. We investigate how inflation influences economic stability and the fiscal mechanisms to manage this variability. Understanding the effects of the volatility that exists primarily in emerging economies and the inflation rates and tax burden variables that are accepted as the causes of instability as macro variables on the national income per capita constitutes an economic research framework based on the fact that they have an essential place in making economic and financial decisions, especially for emerging economies. It is observed that the most critical financial instability issues in emerging economies have emerged for two main reasons. The main reason is the search for financial resources related to increased inflation rates and tax burden variability. This affects economic growth on a GDP basis and changes with the GDP per capita. This impression sometimes contradicts the economic growth targets and creates a mutual handicap by creating different impact values on emerging market economies created by the global economic crisis. The search for financial resources in the emergence of current deficits in the most critical instability problems related to countries representing emerging markets is evolving into a position where direct tax resources can be further increased and thus affect the tax burden. This evolution also occurs in countries representing emerging market economies in a structure where inflation continues. The findings, especially with the impact of emerging market economies on each other at the global level, are observed to be in a remarkable position, especially with the impact values of emerging market economies on each other, which are close to each other. This finding reveals that although GDP per capita is affected by different impact values, for countries representing emerging markets, this triggers a process where the two main reasons are the constant increase in tax burden and price instabilities and, above all, the emergence of a higher scale deviation effect trend.