%0 Journal Article %T REVENUE ELASTICITY OF THE MAIN FEDERAL TAXES IN MEXICO %A Felipe J Fonseca %A Daniel Ventosa-Santaularia %J Latin American Journal of Economics %D 2011 %I Pontificia Universidad Cat¨®lica de Chile %X An inelastic tax system increases the uncertainty associated with tax revenue collection. This results in continuous short-term adjustments to maintain the stability of tax collection. In this paper, we estimate the revenue elasticity of the principal taxes in Mexico, finding a much greater elasticity than that found in previous studies. A cointegration model between the revenue and taxes is used which satisfies strong exogeneity, providing a basis for congruent and reliable projections. Using this model, the tax revenue projected for 2011 is much lower than the estimates prepared by Mexico's federal government. %K Federal taxes %K long-term revenue elasticity %K cointegration %K strong exogeneity %K forecasts %U http://www.scielo.cl/scielo.php?script=sci_arttext&pid=S0719-04332011000100004