A carregar...
Publicação
Real transfers and the Friedman rule
| Nome: | Descrição: | Tamanho: | Formato: | |
|---|---|---|---|---|
| 432.08 KB | Adobe PDF |
Autores
Orientador(es)
Resumo(s)
We find that the Friedman rule is not optimal with real government transfers and distortionary taxation. As transfers cannot be taxed, a positive nominal net interest rate is the indirect way to tax the additional income derived from transfers. This result holds for heterogeneous agents, standard homogeneous preferences, and constant returns to scale production functions. The presence of real transfers changes the standard optimal taxation result of uniform taxation. Higher transfers imply higher optimal inflation rates. We calibrate a model with transfers to the US economy and obtain optimal values for inflation substantially above the Friedman rule.
Descrição
Silva thanks the hospitality of the Banco de Portugal, where he wrote part of this paper, and acknowledges financial support from Banco de Portugal, FCT, NOVA FORUM, and Nova SBE Research Unit. We acknowledge financial support from ADEMU. This work was funded by FCT Fundação para a Ciência e Tecnologia (FCT PTDC/IIM-ECO/4825/2012, UID/ECO/00124/2013 and Social Sciences Data Lab, Project 22209), by POR Lisboa (LISBOA-01-0145-FEDER-007722 and Social Sciences Data Lab, Project 22209) and POR Norte (Social Sciences Data Lab, Project 22209)
Palavras-chave
Fiscal policy Friedman rule Inflation Monetary policy Taxes Transfers Economics and Econometrics