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The revenue smoothing hypothesis in an ARIMA Framework: Evidence from the United States, in Claude Diebolt, Catherine Kyrtsou et al. (eds.), New Trends in Macroeconomics

Gogas, Periklis and Serletis, Apostolos (2005): The revenue smoothing hypothesis in an ARIMA Framework: Evidence from the United States, in Claude Diebolt, Catherine Kyrtsou et al. (eds.), New Trends in Macroeconomics. Published in: in Claude Diebolt, Catherine Kyrtsou et al. (eds.), New Trends in Macroeconomics (2005): pp. 79-88.

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Abstract

This paper tests Mankiw’s (1987) revenue-smoothing hypothesis, that the inflation rate moves one-for-one with the marginal tax rate in the long run, using the new average marginal tax rate series constructed by Stephenson (1998) and the long-horizon regression approach developed by Fisher and Seater (1993). It reports considerable evidence against revenue-smoothing.

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