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Tax Smoothing and Expenditure Creep




Tax smoothing minimises the economic costs of raising taxes to finance a varying profile of expenditure. This standard result assumes that expenditure pressures do not vary with the short term fiscal position. In the presence of expenditure creep, however, tax smoothing is no longer optimal tax policy.

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  • Chris Pinfield, "undated". "Tax Smoothing and Expenditure Creep," Treasury Working Paper Series 98/09, New Zealand Treasury.
  • Handle: RePEc:nzt:nztwps:98/09

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    References listed on IDEAS

    1. Noriyuki Takayama & Yukinobu Kitamura, 1994. "Household Saving Behavior in Japan," NBER Chapters,in: International Comparisons of Household Saving, pages 125-168 National Bureau of Economic Research, Inc.
    2. Deaton, Angus, 1991. "Saving and Liquidity Constraints," Econometrica, Econometric Society, vol. 59(5), pages 1221-1248, September.
    3. Patrick J. Bayer & B. Douglas Bernheim & John Karl Scholz, 2009. "The Effects Of Financial Education In The Workplace: Evidence From A Survey Of Employers," Economic Inquiry, Western Economic Association International, vol. 47(4), pages 605-624, October.
    4. James M. Poterba, 1994. "International Comparisons of Household Saving," NBER Books, National Bureau of Economic Research, Inc, number pote94-1, January.
    5. Hall, Robert E & Mishkin, Frederic S, 1982. "The Sensitivity of Consumption to Transitory Income: Estimates from Panel Data on Households," Econometrica, Econometric Society, vol. 50(2), pages 461-481, March.
    6. James M. Poterba, 1994. "Introduction to "International Comparisons of Household Saving"," NBER Chapters,in: International Comparisons of Household Saving, pages 1-10 National Bureau of Economic Research, Inc.
    7. Hubbard, R Glenn & Skinner, Jonathan & Zeldes, Stephen P, 1994. "Expanding the Life-Cycle Model: Precautionary Saving and Public Policy," American Economic Review, American Economic Association, vol. 84(2), pages 174-179, May.
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    Cited by:

    1. Nick Davis, 2001. "Does Crown Financial Portfolio Composition Matter?," Treasury Working Paper Series 01/34, New Zealand Treasury.

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