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Author: Mr.Nurun N. Choudhry
Publisher: International Monetary Fund
ISBN: 1451921063
Category : Business & Economics
Languages : en
Pages : 30
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Book Description
This paper analyzes the optimal rate of monetary expansion when government resorts to inflationary finance to generate additional investment for enhancing growth. If there are lags in tax collection, an increase in inflation erodes real fiscal revenue, thereby worsening the current balance while reducing government investment. This impedes capital accumulation as well as increases the welfare cost of inflation. As such, the optimal rate of monetary expansion, equilibrium capital-labor ratio and output are lower while the marginal cost of inflationary finance is higher than they would be without collection lags. Simulations are performed to highlight empirical implications.
Author: Mr.Nurun N. Choudhry
Publisher: International Monetary Fund
ISBN: 1451921063
Category : Business & Economics
Languages : en
Pages : 30
Get Book Here
Book Description
This paper analyzes the optimal rate of monetary expansion when government resorts to inflationary finance to generate additional investment for enhancing growth. If there are lags in tax collection, an increase in inflation erodes real fiscal revenue, thereby worsening the current balance while reducing government investment. This impedes capital accumulation as well as increases the welfare cost of inflation. As such, the optimal rate of monetary expansion, equilibrium capital-labor ratio and output are lower while the marginal cost of inflationary finance is higher than they would be without collection lags. Simulations are performed to highlight empirical implications.
Author: Mr.Nurun N. Choudhry
Publisher: International Monetary Fund
ISBN: 1451972180
Category : Business & Economics
Languages : en
Pages : 32
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Book Description
This paper analyzes the erosion of fiscal revenue by inflation resulting from the issuance of money. The empirical evidence for a number of developing countries supports the well-known hypothesis that an increase in inflation will result in a fall in real fiscal revenue because of collection lags, thereby possibly widening the fiscal deficit. As such, attempts to generate resources to finance government expenditures via the inflation tax will involve a loss in other revenues, making this form of taxation even less desirable.
Author: Nurun N. Choudhry
Publisher:
ISBN:
Category :
Languages : en
Pages : 26
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Book Description
Author: Mr.Nurun N. Choudhry
Publisher: International Monetary Fund
ISBN: 1451976372
Category : Business & Economics
Languages : en
Pages : 22
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Book Description
The paper provides empirical evidence on collection lags in major categories of government revenue and analyzes the estimated revenue-eroding effects of inflation within the standard model of inflationary finance. The evidence indicates a wide variation in collection lags among the categories of revenues. The estimated erosion of real fiscal revenue, although varied in the sample countries, appears to have substantially offset gains from the inflation tax, thereby severely restricting the use of this form of taxation in generating resources.
Author: Nurun N. Choudhry
Publisher:
ISBN:
Category :
Languages : es
Pages : 26
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Book Description
Author: International Monetary Fund
Publisher: International Monetary Fund
ISBN: 1451949022
Category : Business & Economics
Languages : en
Pages : 34
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Book Description
This paper analyzes the relationship between inflation tax and the level of government spending in a public finance context. The key feature of the model developed is that it recognizes the possibility that conventional taxes, such as the consumption tax, may carry increasing marginal collection costs. As a result, and unlike previous findings in the literature, the inflation tax becomes an increasing function of government spending. Furthermore, the more inefficient the tax collection system, the larger the increase in the inflation tax for a given increase in government spending. A numerical analysis of the model provides additional insights into these relationships.
Author: Nurun Choudhry
Publisher:
ISBN:
Category :
Languages : en
Pages : 32
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Book Description
This paper analyzes the erosion of fiscal revenue by inflation resulting from the issuance of money. The empirical evidence for a number of developing countries supports the well-known hypothesis that an increase in inflation will result in a fall in real fiscal revenue because of collection lags, thereby possibly widening the fiscal deficit. As such, attempts to generate resources to finance government expenditures via the inflation tax will involve a loss in other revenues, making this form of taxation even less desirable.
Author: Yaaqov Goldschmidt
Publisher: Rowman & Littlefield
ISBN: 9780847674275
Category : Business & Economics
Languages : en
Pages : 230
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Book Description
This important book contributes significantly to our understanding of financial analysis in an inflationary environment. Major topics covered include the interest charges on working capital, the effect of debt finance on liquidity, the impact of inflation on tax liability resulting from interest on loans, and income measurement with a special emphasis on performance evaluation.
Author: Mr.Mario I. Bléjer
Publisher: International Monetary Fund
ISBN: 9781557750341
Category : Business & Economics
Languages : en
Pages : 404
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Book Description
Edited by Mario I. Blejer and Ke-young Chu, this book investigates linkages among components of the public sector, as well as between macro and micro aspects of fiscal policy, in developing countries. It presents 13 papers prepared by economists of the IMF's Fiscal Affairs Department.
Author: Mr.A. Javier Hamann
Publisher: International Monetary Fund
ISBN: 1451845499
Category : Business & Economics
Languages : en
Pages : 20
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Book Description
The present paper provides an analytical discussion on a popular issue: the measurement problems associated with the inflation tax. It is well known that conventional national accounts definitions usually misplace the proceeds from the inflation tax: they are typically not subtracted from disposable income, and they are not included as part of the Government’s revenues “above the line.” Using a simple, perfect foresight monetary model developed by Calvo (1986, 1987), this paper analyzes the difference between macroeconomically relevant concepts of public and private saving, and their national accounts counterparts. The paper goes on to show that the national account aggregates create the impression that heavier reliance on the inflation tax on the part of the Government is associated with higher private saving, even in situations where the composition of government revenues does not have any effect on private saving.
