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Corruption, inflation and growth

  • Blackburn, Keith
  • Powell, Jonathan

We present a model in which the embezzlement of tax revenues by public officials leads the government to rely more on seigniorage to finance its expenditures. This raises inflation which depresses investment and growth via a cash-in-advance constraint.

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File URL: http://www.sciencedirect.com/science/article/pii/S0165176511002631
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Article provided by Elsevier in its journal Economics Letters.

Volume (Year): 113 (2011)
Issue (Month): 3 ()
Pages: 225-227

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Handle: RePEc:eee:ecolet:v:113:y:2011:i:3:p:225-227
Contact details of provider: Web page: http://www.elsevier.com/locate/ecolet

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  1. Imam Patrick Amir & Jacobs Davina, 2014. "Effect of Corruption on Tax Revenues in the Middle East," Review of Middle East Economics and Finance, De Gruyter, vol. 10(1), pages 24, April.
  2. Al-Marhubi, Fahim A., 2000. "Corruption and inflation," Economics Letters, Elsevier, vol. 66(2), pages 199-202, February.
  3. Gupta, Rangan, 2008. "Tax evasion and financial repression," Journal of Economics and Business, Elsevier, vol. 60(6), pages 517-535.
  4. Blackburn, Keith & Forgues-Puccio, Gonzalo F., 2005. "Distribution and Development in a Model of Misgovernance," Proceedings of the German Development Economics Conference, Kiel 2005 15, Verein für Socialpolitik, Research Committee Development Economics.
  5. N Bose & J A Holman & K C Neanidis, 2005. "The Optimal Public Expenditure Financing Policy: Does the Level of Economic Development Matter?," Centre for Growth and Business Cycle Research Discussion Paper Series 57, Economics, The Univeristy of Manchester.
  6. Keefer, Philip & Knack, Stephen, 1997. "Why Don't Poor Countries Catch Up? A Cross-National Test of Institutional Explanation," Economic Inquiry, Western Economic Association International, vol. 35(3), pages 590-602, July.
  7. Javier Andres & Ignacio Hernando, 1997. "Does Inflation Harm Economic Growth? Evidence for the OECD," NBER Working Papers 6062, National Bureau of Economic Research, Inc.
  8. Kwabena Gyimah-Brempong, 2002. "Corruption, economic growth, and income inequality in Africa," Economics of Governance, Springer, vol. 3(3), pages 183-209, November.
  9. Hongyi Li & Lixin Colin Xu & Heng-fu Zou, 2000. "Corruption, Income Distribution, and Growth," CEMA Working Papers 472, China Economics and Management Academy, Central University of Finance and Economics.
  10. Paolo Mauro, 1995. "Corruption and Growth," The Quarterly Journal of Economics, Oxford University Press, vol. 110(3), pages 681-712.
  11. Dhaneshwar Ghura, 1998. "Tax Revenue in Sub-Saharan Africa; Effects of Economic Policies and Corruption," IMF Working Papers 98/135, International Monetary Fund.
  12. De Gregorio, Jose, 1993. "Inflation, taxation, and long-run growth," Journal of Monetary Economics, Elsevier, vol. 31(3), pages 271-298, June.
  13. Roubini, N. & Sala-i-Martin, X., 1992. "A Growth Model of Inflation, Tax Evasion and Financial Repression," Papers 658, Yale - Economic Growth Center.
  14. Adam, Christopher S. & Bevan, David L., 2005. "Fiscal deficits and growth in developing countries," Journal of Public Economics, Elsevier, vol. 89(4), pages 571-597, April.
  15. K Blackburn & N Bose & M E Haque, 2003. "The Incidence and Persistence of Corruption in Economic Development," Centre for Growth and Business Cycle Research Discussion Paper Series 34, Economics, The Univeristy of Manchester.
  16. Stockman, Alan C., 1981. "Anticipated inflation and the capital stock in a cash in-advance economy," Journal of Monetary Economics, Elsevier, vol. 8(3), pages 387-393.
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