Inflation targeting and tax effort: Evidence from Colombia

Galvis Ciro, Juan Camilo and Ferreira de Mendonça, Helder (2016): Inflation targeting and tax effort: Evidence from Colombia.

Abstract

This paper relates to the literature on the possible effect of inflation targeting on fiscal discipline in developing countries. In particular, we present empirical evidence to address this issue based on the Colombian experience. An empirical analysis to evaluate the reputation gains of the central bank on tax capacity use is made. The results indicate that an increase in the reputation of the monetary authority can lead to an increased tax effort.

• Item Type: MPRA Paper
• Language: English
• Keywords: tax capacity, tax effort, inflation targeting, reputation.
• Subjects: E - Macroeconomics and Monetary Economics > E5 - Monetary Policy, Central Banking, and the Supply of Money and Credit; E - Macroeconomics and Monetary Economics > E5 - Monetary Policy, Central Banking, and the Supply of Money and Credit > E51 - Money Supply ; Credit ; Money Multipliers; E - Macroeconomics and Monetary Economics > E5 - Monetary Policy, Central Banking, and the Supply of Money and Credit > E58 - Central Banks and Their Policies; E - Macroeconomics and Monetary Economics > E6 - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook > E61 - Policy Objectives ; Policy Designs and Consistency ; Policy Coordination

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