Inflation and Taxes in a Growing Economy with Debt and Equity Finance

摘要: Our tax system was designed for an economy with little or no inflation. The current paper shows that inflation causes capricious changes in the effective rate of on capital income and therefore real net return savers receive. This is not only a temporary disequilibrium effect but one which persists steady-state equilibrium. Unlike earlier papers by Feldstein Green Sheshinski, study recognizes firms finance investment both debt equity ratio depends rates