Government Spending and Inflationary Finance: A Public Finance Approach
The dependence of the inflation tax on the level of government spending is analyzed in a public finance context. The key feature of the model is that it recognizes the possibility that conventional taxes, such as the consumption tax, carry increasing marginal collection costs. As a result, the inflation tax becomes an increasing function of government spending. Furthermore, the more inefficient the tax-collection system is, the larger is the rise in the nominal interest rate for a given increase in government spending. A numerical analysis of the model provides additional insights into these relationships.
Volume (Year): 36 (1989)
Issue (Month): 3 (September)
|Contact details of provider:|| Web page: http://www.palgrave-journals.com/|
|Order Information:||Web: http://www.springer.com/economics/journal/41308/PS2|
When requesting a correction, please mention this item's handle: RePEc:pal:imfstp:v:36:y:1989:i:3:p:657-677. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Sonal Shukla)or (Rebekah McClure)
If references are entirely missing, you can add them using this form.