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Revenue decentralization and inflation: A re-evaluation

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  • Baskaran, Thushyanthan

Abstract

A problematic feature of the existing empirical literature on the relationship between revenue decentralization (RD) and inflation is the use of inaccurate measures for RD. Using a newly constructed measure for RD that accounts for over-time changes in sub-national tax autonomy, this paper finds that RD leads to lower inflation.

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Bibliographic Info

Article provided by Elsevier in its journal Economics Letters.

Volume (Year): 116 (2012)
Issue (Month): 3 ()
Pages: 298-300

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Handle: RePEc:eee:ecolet:v:116:y:2012:i:3:p:298-300

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Keywords: Fiscal decentralization; Inflation; Sub-national tax autonomy;

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  1. Cukierman, Alex & Webb, Steven B & Neyapti, Bilin, 1992. "Measuring the Independence of Central Banks and Its Effect on Policy Outcomes," World Bank Economic Review, World Bank Group, vol. 6(3), pages 353-98, September.
  2. Levy-Yeyati, Eduardo & Sturzenegger, Federico, 2005. "Classifying exchange rate regimes: Deeds vs. words," European Economic Review, Elsevier, vol. 49(6), pages 1603-1635, August.
  3. Dan Stegarescu, 2005. "Public sector decentralisation: measurement concepts and recent international trends," Fiscal Studies, Institute for Fiscal Studies, vol. 26(3), pages 301-333, September.
  4. Neyapti, Bilin, 2004. "Fiscal decentralization, central bank independence and inflation: a panel investigation," Economics Letters, Elsevier, vol. 82(2), pages 227-230, February.
  5. Thornton, John, 2007. "Further evidence on revenue decentralization and inflation," Economics Letters, Elsevier, vol. 95(1), pages 140-145, April.
  6. King, David & Ma, Yue, 2001. "Fiscal decentralization, central bank independence, and inflation," Economics Letters, Elsevier, vol. 72(1), pages 95-98, July.
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Cited by:
  1. Hessami, Zohal & Silke, Uebelmesser, 2012. "Empirical determinants of in-kind redistribution: Partisan biases and the role of inflation," MPRA Paper 38494, University Library of Munich, Germany.
  2. Oto-Peralías, Daniel & Romero-Ávila, Diego & Usabiaga, Carlos, 2013. "Does fiscal decentralization mitigate the adverse effects of corruption on public deficits?," European Journal of Political Economy, Elsevier, vol. 32(C), pages 205-231.

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