EconPapers    
Economics at your fingertips  
 

Tax Smoothing in a Financially Repressed Economy; Evidence from India

Paul Cashin (), Nilss Olekalns () and Ratna Sahay

No 98/122, IMF Working Papers from International Monetary Fund

Abstract: India has a long history of running fiscal deficits. Two broad considerations motivate a government to run a deficit: tax smoothing and tax tilting. This paper tests a version of Barro’s tax-smoothing model, using Indian data for the period 1951-52 to 1996-97. The empirical results indicate that the central government of India has tax-smoothed, while the regional governments of India have not. The paper also finds evidence of tax tilting, reflected in financial repression, which has led to the accumulation of excessive public liabilities.

Keywords: Fiscal policy; India; Tax smoothing, financial repression, budget surplus, government expenditure, fiscal deficits, budget constraint (search for similar items in EconPapers)
Date: 1998-08-01
References: Add references at CitEc
Citations: View citations in EconPapers (12) Track citations by RSS feed

Downloads: (external link)
http://www.imf.org/external/pubs/cat/longres.aspx?sk=2715 (application/pdf)

Related works:
Working Paper: Tax Smoothing in a Financially Repessed Economy: Evidence from India (1998)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:imf:imfwpa:98/122

Ordering information: This working paper can be ordered from
http://www.imf.org/external/pubs/pubs/ord_info.htm

Access Statistics for this paper

More papers in IMF Working Papers from International Monetary Fund International Monetary Fund, Washington, DC USA. Contact information at EDIRC.
Bibliographic data for series maintained by Jim Beardow ().

 
Page updated 2019-10-17
Handle: RePEc:imf:imfwpa:98/122