논문KCI 등재
Optimal Government Finance and Democracy in Developing Countries
경제연구소 (Hanyang Economic Research Institute)|2004.12|Journal of Economic Development|제29권 제2호|pp. 131-148
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Abstract
Optimal government finance models illustrating trade-offs between different policy instruments, such as seigniorage and income taxes, have focused on industrialized countries. In this paper, a model that includes the effective reserve ratio and currency growth rate as instruments is derived from a welfare loss function and is estimated using fixed effects for a sample of 29 developing countries. The results indicate that the governments in the sample use the reserve requirement to minimize the welfare losses associated with seigniorage revenue. Mid-level democracies are associated with the highest effective reserve ratios.
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