Signaling Fiscal Regime Sustainability
Posted: 3 Apr 2000
There are 2 versions of this paper
Signaling Fiscal Regime Sustainability
IMF Working Paper No. 99/86
Number of pages: 38
Posted: 11 Feb 2006
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65
Date Written: 1999
Abstract
This paper proposes a signaling model that offers a new perspective on why governments deviate from optimal tax smoothing and delay debt stabilization. In our model, dependable -but not fully credible- governments have an incentive to tighten the fiscal regime when the signaling effect on credit ratings is larger (that is, when a sufficiently large stock of debt has been accumulated).
Keywords: Fiscal Policy, Taxation, Credit, International Affairs
JEL Classification: E63, H6, F22
Suggested Citation: Suggested Citation
Drudi, Francesco and Prati, Alessandro, Signaling Fiscal Regime Sustainability (1999). Available at SSRN: https://ssrn.com/abstract=217080
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