The net effects of switching from consumption taxation to inflation taxation on resource allocation and welfare crucially depend on production externalities. With elastic labor supply, raising inflation taxation decreases leisure, but increases the levels of real consumption, capital, and output. Moreover, this tax switch has two opposing effects on the level of real money balances: A positive ...

the study investigates the impact of taxation on the nigerian economy for the period 1994 -2012.the dependent variables used in the model includes: gross domestic product (gdp) as a parameter for measuring economic growth, inflation and unemployment. the objective is this study is to determine how taxation affects these macroeconomic variables. to avoid spurious results, the data set collected ...

Differential tax analysis is used to show how the optimal mix of inflation tax and direct taxation changes with the relative size of the hidden economy. The larger the relative size of the hidden economy, the smaller the optimal ratio of direct tax to inflation tax. Anecdotal empirical evidence supports this result. JEL Classification: E62, H21, H26, O17.

We reconsider the role of an inflation conservative central banker in a setting with distortionary taxation. To do so, we assume monetary and fiscal policy are decided by independent authorities that do not abide to past commitments. If the two authorities make policy decisions simultaneously, inflation conservatism causes fiscal overspending. But if fiscal policy is determined before monetary ...

Among the distortions generated by inflation, those caused by its interaction with taxation are particularly important. Due to the non-indexation of the tax system, inflation exacerbates the inefficiencies generated by taxation. The aim of this paper is to evaluate the welfare effects of these distortions in New Zealand. By using a stylised model of the New Zealand tax system, the tax burden on...

I study the effects of long-run inflation and income taxation in an economy where households face uninsurable idiosyncratic risks. I construct a tractable competitive search framework that generates dispersion of prices, income and wealth. I analytically characterize the stationary equilibrium and the policy effects on individual choices. Quantitative analysis finds that monetary and fiscal pol...