In an economy with a debt overhang, investment depends on expected tax rates. On the other hand, expected tax rates depend on the debt’s face value. Therefore investment depends on the face value of debt. I show that this may lead to a positive or negative association between debt and...

This paper provides empirical evidence on the determinants of long-term growth performance in a sample of 55 developing countries grouped by income levels. The evidence indicates that a model incorporating the savings rate, export performance, expenditures on human capital development, the...

This paper tests a version of Barro’s tax-smoothing model, which assumes intertemporal optimization by a government seeking to minimize the distortionary costs of taxation, using Pakistan and Sri Lankan data for 1956-95 and 1964-97, respectively. The empirical results indicate that...

This paper examines the possibility of ascertaining the welfare changes that occur when a consumption tax replaces an equal-yield income tax. It finds that those with saving/income ratios greater than the social saving/income ratio under the income tax will surely benefit and those with ratios...

Much of the recent research of the international economic consequences of budget deficit has been conducted under the assumption that taxes are lump sum. It has thus abstracted from important issues that arise in the context of distortionary tax systems. Our analysis deals with the international...

Inflation-forecast targeting is state of the art for monetary policy. This book explores first principles, including managing short-term policy trade-offs. The book also outlines efficient operational procedures and reviews the experiences of Canada, the Czech Republic, and India. The analysis...