Optimal Taxation Policies in the EMS: A Two-Country Model of Public Finance
AbstractConstraints on policy variables that are likely to develop in the context of the European Monetary System by 1992 are incorporated into a public finance framework. The effects of such constraints on the optimal use of the inflation and consumption tax are analyzed. Two questions are addressed: how the constraint of a common inflation rate, necessary to preserve fixed exchange rates, influences optimal policy decisions concerning the inflation tax; and how the harmonization of consumption taxes affects the spread between national inflation rates.
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Bibliographic InfoArticle provided by Palgrave Macmillan in its journal Staff Papers - International Monetary Fund.
Volume (Year): 37 (1990)
Issue (Month): 2 (June)
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Web page: http://www.palgrave-journals.com/
Postal: Palgrave Macmillan Journals, Subscription Department, Houndmills, Basingstoke, Hampshire RG21 6XS, UK
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- Tori, Cynthia Royal, 1997. "What is the optimal size of a monetary union?," International Review of Economics & Finance, Elsevier, vol. 6(1), pages 57-66.
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