Series: IMF Working Papers
Author(s): Paul Cashin , Nilss Olekalns , and Ratna Sahay
Publisher: INTERNATIONAL MONETARY FUND
Publication Date: 01 August 1998
Keywords: Fiscal policy, India, Tax smoothing, financial repression, budget surplus, government expenditure, fiscal deficits, budget constraint
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...