This paper tests the extended tax-smoothing model for a sample of 32 developing countries. Importantly, the testable implications employed relax the assumption of constant money velocity. Although seigniorage is an important source of revenue in developing countries, all the evidence indicates...

This paper tests the extended tax‐smoothing model for a sample of 32 developing countries. Importantly, the testable implications employed relax the assumption of constant money velocity. Although seigniorage is an important source of revenue in developing countries, all the evidence indicates...