Taxation and inflation: A new explanation for capital flows

• 成果类型: Article
• 署名作者: Bayoumi, T; Gagnon, J
• 署名单位: Federal Reserve System - USA
• 刊物名称: JOURNAL OF MONETARY ECONOMICS
• ISSN/ISSBN: 0304-3932
• DOI: 10.1016/S0304-3932(96)01274-3
• 发表日期: 1996
• 页码: 303-330
• 关键词: cost of capital; net foreign assets; return to saving; tax distortion

摘要

In a world of mobile capital, the current system of taxation implies that the after-tax cost of capital and return to saving in each country are negatively correlated with the rate of inflation. Thus a country's net foreign asset position ought to be negatively correlated with its long-run inflation rate. The magnitude of these effects is shown to be potentially large. For OECD countries, cross-section and time-series regressions confirm that inflation rates are good predictors of net foreign assets. The existing distribution of net foreign assets may therefore largely reflect tax distortions.