| Popis: |
In this chapter, we consider a situation in which regional governments use consumption and capital taxes to finance required government expenditures and a central government enacts a helicopter monetary policy independently. Under this policy, the central government equally distributes newly printed money to the regional economies. We consider two scenarios, one in which the government expenditures of the regional economies are totally wasted and one in which they are reimbursed. In both scenarios, as the monetary expansion rate increases, the optimal regional tax mix shifts toward capital taxation. We also show that the optimal level of the consumption tax is higher in the case of reimbursement for a given monetary expansion rate. |
