When a country enters a period of inflation, the nominal rate of interest that would leave a lender with his preinflation real interest income, and a borrower with his preinflation real cost of borrowing, must be r*, which can be expressed as <tex-math>$r^{\ast}=r+\frac{a}{1-t}$</tex-math> where r is the...

The paper deals with the ongoing controversy about whether fiscal deficits bring about higher interest rates and whether the historically high peacetime fiscal deficits experienced by the United States in recent years have been the main factor explaining the extraordinarily high level of U.S....

This paper discusses in a systematic and comprehensive way the existing literature on the relationship between the growth of countries' economies and various public finance instruments, such as tax policy, expenditure policy, and overall budgetary policy, from the perspectives of allocative...

This paper deals with a theoretical issue that also has some practical relevance. The issue is whether the demand for money in a country such as the United States is affected only by the rate of interest, as is normally argued, or whether it is affected by both the rate of interest and...

This article presents yearly estimates for the underground economy in the United States for the period 1930-80. The method used for calculation is one developed a few years ago by the author, and it has been used in many other countries. The main conclusions can be summarized as follows: (1) in...

The literature on inflationary finance has dealt only with the case in which inflation leaves the real revenue from the tax system unaffected. However, in most cases, inflation brings about changes in real tax revenue. If the average lag in tax collection is short and the price elasticity of the...

The presence of high inflation raises questions about the usefulness of the conventional measure of the fiscal deficit as a gauge of necessary fiscal adjustment. Economists are divided on this issue: those who believe that regardless of inflation the conventional measure is the relevant one; and...

Tax evasion is universal. It depends on the economic and tax structures, types of income, and social attitudes. The theory of tax evasion has limitations since it rests solely on attitudes toward risk, with full information regarding the tax administration's behavior. Methodologies for...