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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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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 36911.

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Date of creation: 2011
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Handle: RePEc:pra:mprapa:36911

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

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  1. Neyapti, Bilin, 2004. "Fiscal decentralization, central bank independence and inflation: a panel investigation," Economics Letters, Elsevier, Elsevier, vol. 82(2), pages 227-230, February.
  2. Thornton, John, 2007. "Further evidence on revenue decentralization and inflation," Economics Letters, Elsevier, Elsevier, vol. 95(1), pages 140-145, April.
  3. Levy-Yeyati, Eduardo & Sturzenegger, Federico, 2005. "Classifying exchange rate regimes: Deeds vs. words," European Economic Review, Elsevier, Elsevier, vol. 49(6), pages 1603-1635, August.
  4. King, David & Ma, Yue, 2001. "Fiscal decentralization, central bank independence, and inflation," Economics Letters, Elsevier, Elsevier, vol. 72(1), pages 95-98, July.
  5. 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.
  6. 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, World Bank Group, vol. 6(3), pages 353-98, September.
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Cited by:
  1. 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.
  2. Zohal Hessami & Silke Uebelmesser, 2012. "Empirical Determinants of In-kind Redistribution: Partisan Biases and the Role of Inflation," Working Paper Series of the Department of Economics, University of Konstanz 2012-20, Department of Economics, University of Konstanz.

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