Description |
1 online resource (43 pages) : illustrations |
Series |
IMF working paper, 2227-8885 ; WP/98/122 |
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IMF working paper ; WP/98/122.
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Summary |
Why do governments run fiscal deficits? One rationale for the existence of fiscal imbalances is to minimize the distortionary effects of levying nonlump-sum taxes (for a given present value of tax collections), by spreading the burden of these taxes over time. That is, if taxes are distorting decisions to work or consume, then the timing of taxes will matter. This concept of tax smoothing, first introduced by Barro (1979), is now well established in the literature on fiscal policy. 2 Tax smoothing has the normative implication that budget imbalances can be optimal fiscal policy responses to anticipated future events. In particular, a government anticipating an increase in its own expenditure can minimize the distortionary effects of raising the finance for that expenditure if it brings forward some of the associated tax increase and runs a budget surplus (or a smaller deficit) in the current period. Similarly, a budget deficit (or a smaller surplus) is optimal if the government anticipates future falls in its expenditure |
Bibliography |
Includes bibliographical references (pages 38-43) |
Notes |
Master and use copy. Digital master created according to Benchmark for Faithful Digital Reproductions of Monographs and Serials, Version 1. Digital Library Federation, December 2002. http://purl.oclc.org/DLF/benchrepro0212 MiAaHDL |
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English |
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digitized 2010 HathiTrust Digital Library committed to preserve pda MiAaHDL |
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Print version record |
Subject |
Budget deficits -- India -- Mathematical models
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Debts, Public -- India -- Mathematical models
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Fiscal policy -- India -- Mathematical models
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Taxation -- India -- Mathematical models
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Budget deficits -- Mathematical models
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Debts, Public -- Mathematical models
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Fiscal policy -- Mathematical models
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Taxation -- Mathematical models
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India
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Form |
Electronic book
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Author |
Olekalns, Nilss
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Sahay, Ratna
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International Monetary Fund. Fiscal Affairs Department.
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ISBN |
1282004395 |
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9781282004399 |
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1451899807 |
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9781451899801 |
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1462300472 |
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9781462300471 |
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1452712891 |
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9781452712895 |
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9786613795694 |
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6613795690 |
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9781451854466 |
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1451854463 |
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