Degrees of tax indexation and nominal interest rates: Effects of inflation on incentives to save and invest
Tóm tắt
This paper examines the effects of inflation expectations on nominal interest rates, and incentives to save and invest under partial and complete tax indexation schemes. One would expect that a partially indexed structure would be better than a non-indexed system. However, this is not the case—it reduces the adverse effects of inflation on the incentives to save, but accentuates them on the incentives to invest. Moreover, a change from a non-indexed tax structure to a fully-indexed structure will, ceteris paribus, lead to lower equilibrium interest rates, whereas a switch to a partially indexed system will imply higher rates.
Tài liệu tham khảo
Amano RA (1998) On optimal seigniorage hypothesis. J Macroecon 20:295–308
Bonato L (1999) Price stability: some costs and benefits in New Zealand. N Z Econ Pap 33:27–49
Bond S, Devereux M, Freeman H (1990) Inflation non-neutralities in the U.K. Corporation Tax. Fisc Stud 11:21–28
Dolde W (1980) Issues and models in empirical research on aggregate consumer expenditure. In: Carnegie-Rochester conference series on public policy, pp 161–205
Feldstein M (1976) Inflation, income taxes and the rate of interest: a theoretical analysis. Am Econ Rev 66:230–809
Feldstein M (1980) Inflation, tax rules and the stock market. J Monet Econ 6:309–331
Feldstein M (1982) Inflation, tax rules and investment: some econometric evidence. Econometrica 50:825–862
Feldstein M (1997) The costs and benefits of going from low inflation to price stability. NBER working paper, no 5469
Feldstein M, Summers LH (1979) Inflation and the taxation of capital income in the corporate sector. Natl Tax J 32:445–470
Gordon R, Malkiel B (1979) Taxation and bankruptcy costs. Mimeo
Leach J (1988) The optimal indexation of asymmetric information contracts. Can J Econ 21:61–71
Meyer LH, Sahu AP (1995) Inflation non-neutralities and the response of interest rates to inflation expectations. East Econ J 21:67–80
Roisland O (2006) Inflation inertia and the optimal hybrid inflation/price-level target. J Money Credit Bank 38:2247–2251
Sahuc J (2006) Partial indexation, trend inflation, and the hybrid phillips curve. Econ Lett 90:42–50
Sargent TJ (1972) Anticipated inflation and the nominal pate of interest. Q J Econ 86:212–253
Summers LH (1983) The non-adjustment of nominal interest rates: a study of the fisher effect. In: Tobin J (ed) Macroeconomics, prices, and quantities. The Brookings Institution, Washington, pp 201–240
Tobin J (1965) Money and economic growth. Econometrica 33:671–684
US Department of Treasury (1984) Tax reform for fairness, simplicity and economic growth
US Department of Treasury (1985) Tax propals for fairness, growth and simplicity