Countries in recession, among them Croatia, have lower tax revenues as a result of unfavorable economic situation, which is decrease of the economic activities and unemployment. The global tax base has decreased. In order to create larger state revenues, states use the institute of tax authorities. By controlling transfer pricing in the international companies and using certain techniques, tax ...

Abstract: A standard timing protocol allows in a cash-in-advance model allows the government to elude the inflation tax. That matters. Altering the timing of tax collections to make the government hold cash overnight disables some classical propositions but enables others. The altered timing protocol loses a Ricardian proposition and also the proposition that open market operations, accompanied...

We describe a simple mechanism that generates inflation persistence in a standard sticky-price model of optimal fiscal and monetary policy. Key to this mechanism is that policies are implemented under discretion. The government’s discretionary incentive to erode the real value of nominal public debt by means of surprise inflation renders inflation expectations and, in further consequence, equil...

This paper uses data on short-term nominal interest rates and inflation rates over the last three decades collected from eight industrialized nations to examine the whether the Fisher relation has empirical support internationally. The results indicate that the Fisher relation has a great deal of support with all eight countries exhibiting cointegration between nominal rates and inflation. In s...

This paper does two things. First, it shows both anecdotal and cross-country evidence that indicates that countries that have experienced hyperinflation display significantly lower long-term rates of inflation than countries that lack the same experience. Secondly, it presents a model to rationalize the main empirical finding. There is more than one mechanism through which the long-term effects...

We characterize the Ramsey optimal rate of inflation in a model with a foreign demand for domestic currency. In the absence of such demand, the model implies that the Friedman rule—deflation at the real rate of interest— is optimal. We show analytically that in the presence of a foreign demand for domestic currency, this result breaks down. Calibrated versions of the model deliver optimal annua...

OBJECTIVE To prove that higher cigarette taxes eventually decrease smoking and do also increase state incomes from tobacco taxes by using Hungarian figures. METHOD Collection and analysis of available data on tobacco use, levels of excise and value added taxes on tobacco products and state incomes originating from the tobacco sector. CONCLUSIONS In Hungary, regular tobacco tax increases res...

This paper examines the macroeconomic effects of foreign aid transfers in a small open recipient economy. The focus, however, is not on the impact of foreign aid per se but rather on aid’s influence conditional upon the different budgetary financing policies under the discretion of the recipient government. We compare the effects of an aid transfer tied to investment in a public good from a pur...