This paper examines the idea that the rate of inflation tends to increase nominal government expenditures faster than government revenues. it concludes that while government expenditures rise concurrently with inflation, real government revenues tend to fall based on collection tags. Empirical results using time series data for Iran support our expectations in which the longer is the delay in g...

Inflation depends generically on current and expected monetary and fiscal policies. There are three ways to carry $1 today into the future: money, bonds, and real assets. That dollar’s purchasing power varies inversely with the price level. The real return on money depends on the flow of transactions services it supports and the expected inflation rate; the analogous return on bonds is the nomi...

Abstract Tax is a financial charge imposed on individuals by state in different forms like direct tax paid directly by individuals, indirect tax collected by intermediaries and deposited to Government like sales tax. Taxation plays an important role in the process of revenue generation and to run various activities in an economy. The study empirically demonstrates various factors involved in di...

We determine the second best rule for the inflation tax in monetary general equilibrium models where money is dominated in rate of return. The results in the literature are ambiguous and inconsistent across different monetary environments. We derive and compare the optimal inflation tax solutions across the different environments and find that Friedman's policy recommendation of a zero nominal ...

Recent years have witnessed very high and volatile interest rates. This has stirred a debate among analysts as to whether observed interest rates are high by historical standards. Some analysts, focusing on the before-tax real rate, argue that if the observed nominal interest rate is corrected for the effect of expected (or actual) inflation, the ex ante (or ex post) real rate has been very hig...

the main goal of this research is studying the causative & effect of deficit budget, money offering and inflation rate in iran during 1360-1390. the results in long time indicates that the bulk of money has had positive effect & meaning on inflation rate during that time and alteration of budget deficit of the government has also positive effect on inflation but by meaningless impress, in other...

This paper studies the interaction between monetary and macro-prudential policies in a simple model with both nominal and financial frictions. The nominal friction gives rise to a conventional monetary policy objective emphasized in the New Keynesian literature. The financial friction, in the form of an occasionally binding collateral constraint, gives rise to a financial stability objective. ...