Can consumption taxes reduce inequality in developing countries? We combine household expenditure data from 31 countries with theory to shed new light on the redistributive potential and optimal design of taxes. use type store which purchases occur proxy for informal (untaxed) consumption. This enables us characterize informality Engel curve: we find that budget share spent sector steeply decli...

In this research, non-linear inflationary dynamics based on the concept of missing money is studied using the threshold autoregressive models based on seasonal data of the time interval (1990:04-2016:07) for the economy of Iran. The finding of the research shows that simple and Divisia liquidity growth variables are determined as threshold variables, and inflation reacts to changes in the growt...

This paper examines if the joint behavior of inflation and relative price variability (RPV) is consistent with threshold nonlinearity. It applies the test procedure proposed by Tsay (1998) to monthly inflation and RPV in the U.S. for a period from January 1947 to October 2000, and finds strong evidence in favor of threshold nonlinearity that signifies asymmetries of the relationship between inf...

This paper develops a theory of inequality and the social contract aiming to explain how countries with similar economic and political “fundamentals” can sustain such different systems of social insurance, fiscal redistribution, and education finance as those of the United States and Western Europe. With imperfect credit and insurance markets some redistributive policies can improve ex ante wel...

CONOMISTS have long sought to understand the links between economic growth and income distribution. The main issues, listed below, have important policy implications for developing countries: • In countries with low levels of development, does economic growth result in a more unequal distribution of income, and is it necessary for per capita income to reach a certain minimum level before income...

Because it taxes and spends, the welfare state is by definition redistributive, but this does not automatically entail that it creates more equality. A quick historical glance at social reform will dispel of any notion that the welfare state was pursued for egalitarian reasons. Its foundations were typically laid by conservative reformers who, like Bismarck, sought primarily to reproduce, rathe...