Seigniorage and tax smoothing in developing countries

Abstract

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 that the principles of optimal taxation have not been used when developing countries raise revenue from inflation.

Citation

Ashworth, J. and Evans, L. (1998), "Seigniorage and tax smoothing in developing countries", Journal of Economic Studies, Vol. 25 No. 6, pp. 486-495. https://doi.org/10.1108/01443589810233865