Taxation, Corruption and the Exchange Rate Regime

Hefeker, Carsten

doi:10.2139/ssrn.1349790

Cited by 3 publications

(3 citation statements)

References 9 publications

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“…This unexpected result deserves looking for possible answers, the corroboration of which opens an interesting field for further research. It is known that countries with high levels of corruption increasingly face macroeconomic instability typical of discretionary fiscal policy, in a scenario of lack of independence of the monetary authority, which has been associate with greater exchange rate instability and generates uncertainty ( Ghosh and Ghosh, 2002 ; Hefeker, 2010 ; Fraj et al., 2018 ). This situation, rather than sporadic, seems natural in this group pf countries up to the point that such instability might by expected and incorporated into government and business plans, probably at the cost of overpricing and a less efficient allocation of resources, but feeding the regulatory framework and procedures of the financial system.…”

Section: Conclusion and Discussionmentioning

confidence: 99%

“…However, low integrity governments may manage both fiscal and monetary policies in a discretional way and resort to devaluations to cover fiscal deficits. According to Hefeker (2010) in countries where corruption is a prevalent phenomenon, monetary policy is used to finance the public budget, facilitated by the lack of independence of central banks ( Acemoglu et al., 2008 ). McKinnon and Pill (1999) and Wei and Wu (2002) associate corruption with over-borrowing behaviors which may affect the countries’ structural composition of capital inflows and lead to currency instability.…”

Section: Background Knowledgementioning

confidence: 99%

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Exchange rate volatility, corruption, and economic growth

Perazzi¹,

Romero²

2022

Heliyon

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Section: Conclusion and Discussionmentioning

confidence: 99%

Section: Background Knowledgementioning

confidence: 99%

Exchange rate volatility, corruption, and economic growth

Perazzi¹,

Romero²

2022

Heliyon

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“…More worryingly, the central bank might actually act honestly because the government wants to monopolize corruption rents (Bohn, 2010). Some authors like Hefeker (2009) go so far as to claim that with a pegged exchange rate, the opportunity of corrupt money printing shrinks – helping to reduce overall corruption in the country. Yet, one robust conclusion remains.…”

Section: Central Bank Corruption/ineptitude Less Than Government’smentioning

confidence: 99%

When should central banks engage in private sector securities purchases?

Michael

Dalko

2023

JES

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Purpose The authors aim to look at the conditions under which central bank easing – and specifically the purchase of private sector securities – can/should contribute to growth, rather than fiscal policy and also ask when can the central bank’s purchase of private sector securities help supplant traditional monetary policy.Design/methodology/approachAfter surveying the existing literature, the authors use simple correlation of central bank private asset (stocks, bonds, etc.), interest rates, gross domestic product (GDP) growth, inflation and the extent of the functioning of domestic banking sectors (among others) to classify countries in which these purchases promote pro-growth investment.FindingsUnder the typical conditions for unconventional monetary policy, central bank purchases of private companies’ securities can promote growth in some places (like Bulgaria, the Ukraine, Georgia and Greece at the time of our writing) while hurting it in others (like in parts of Latin America and Africa in the mid-2010s). The authors find how such purchases effectively “bypass” dysfunctional banking systems and central/government local bodies fiscal spending, making the central bank the “funder of last resort” in many middle and lower income countries.Practical implicationsThis paper tells specific central banks to ramp up – or reduce – their purchases of private sector securities. The authors identify exact jurisdictions where such “helicopter money” has led to investment in the past economic growth.Originality/valueAll previous work on conventional and unconventional monetary policy has looked at the way monetary policy affects investment and growth through the banking system and holding companies’ reactions constant. The authors do the opposite – looking at how companies respond, holding banking system responses constant. No one has ever looked at these private purchases (taken from a special IMF database), much less tried to argue that central banks can sometimes target investment growth much better than fiscal policy. No one has ever considered them as a funder (rather than lender) of last resort.

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Choice of Exchange Rate Regime in a Selection of African Countries

Jordaan

2015

Journal of African Business

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An exchange rate regime has an important impact on macroeconomic policies within developing countries and therefore essential in macroeconomic policy formation. The main research question is to determine how the variety of determinants would influence the exchange rate regime choice for a selection of 19 African developing countries. A distinction is made between three groups of variables, namely economic fundamentals, economic stabilisation aspects and currency crises factors, all affecting a country's exchange regime choice. The probability of these determinants is then estimated to establish whether the selected countries would choose a fixed, an intermediate or a flexible exchange regime.

show abstract

Taxation, Corruption and the Exchange Rate Regime

Cited by 3 publications

References 9 publications

Exchange rate volatility, corruption, and economic growth

Exchange rate volatility, corruption, and economic growth

When should central banks engage in private sector securities purchases?

Choice of Exchange Rate Regime in a Selection of African Countries

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