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Discussion Paper Details

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Title: A Simple Model of Money and Taxes and an Illustration with Brazilian Data

Author(s): Alberto Giovannini and Bart Turtelboom

Publication Date: October 1992

Keyword(s): Cash-in-advance Constraint, Inflation, Money Demand and Taxes

Programme Area(s): International Macroeconomics

Abstract: We explore the properties of velocity in a model where agents are required by law to use money to pay taxes, but not for any other private purchases. The model is applied to Brazil between 1975 and 1990. We show that the model mimics consumption velocity very closely during the high-inflation years.

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Bibliographic Reference

Giovannini, A and Turtelboom, B. 1992. 'A Simple Model of Money and Taxes and an Illustration with Brazilian Data'. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=726