G2TT
来源类型Discussion paper
规范类型论文
来源IDDP15299
DP15299 Monetary Capacity
Roberto Bonfatti; Adam Brzezinski; Kivanç Karaman; Nuno Palma
发表日期2020-09-27
出版年2020
语种英语
摘要Monetary capacity refers to a state's capacity to circulate money that is accepted by the public, whereas fiscal capacity refers to its capacity to tax. In this paper, we show both theoretically and empirically that monetary and fiscal capacity, and by extension, markets and states have a symbiotic relationship. On the theoretical front, we propose a model that establishes that a higher monetary capacity incentivizes the government to invest in the capacity to tax, because monetization eases taxation. Higher fiscal capacity, in turn, increases the public demand for money, because expected inflation is lower. On the empirical front, we find that monetary capacity had a significant and substantial causal impact on fiscal capacity. To identify this impact, we rely on a natural experiment, instrumenting the money stocks of England, France and Spain between 1550 and 1790 by the silver and gold output in the New World. Finally, to put our findings into a long-run perspective, we collect money stock and tax revenue data for European states from antiquity to the modern period, and document the close relationship between the two. These findings indicate that economic and political development cannot be understood independently. They also qualify the theory of the long-run neutrality of money: exogenous changes in money stock can and did have real long-run effects.
主题Economic History ; Macroeconomics and Growth ; Monetary Economics and Fluctuations ; Public Economics
关键词Monetary capacity Fiscal capacity Monetization inflation Taxation Quantity theory of money Monetary non-neutrality
URLhttps://cepr.org/publications/dp15299-0
来源智库Centre for Economic Policy Research (United Kingdom)
资源类型智库出版物
条目标识符http://119.78.100.153/handle/2XGU8XDN/544300
推荐引用方式
GB/T 7714
Roberto Bonfatti,Adam Brzezinski,Kivanç Karaman,et al. DP15299 Monetary Capacity. 2020.
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