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Objective: this article examines expansionary fiscal policy in the context of intergovernmental tax competition from a macroeconomic perspective, analyzing the effects of granting tax benefits under the state value-added tax on the circulation of goods and services (ICMS) on the economic development of Santa Catarina, a state in southern Brazil. Methods: monthly data spanning 1997–2020 were analyzed using a vector autoregression (VAR) model with Granger...