Financial Repression and Optimal Taxation

Posted: 11 Jan 2001

See all articles by Chong-En Bai

Chong-En Bai

The University of Hong Kong - School of Economics and Finance; University of Michigan - William Davidson Institute

David D. Li

Hong Kong University of Science & Technology (HKUST) - Department of Economics

Yingyi Qian

Tsinghua University - School of Economics & Management; Centre for Economic Policy Research (CEPR)

Yijiang Wang

University of Minnesota - Twin Cities - Carlson School of Management

Abstract

Financial repression entails an implicit taxation on savings. When effective income-tax rates are very uneven, as common in developing countries, raising some government revenue through mild financial repression can be more efficient than collecting income tax only.

Keywords: Financial repression, Savings tax, Optimal taxation, Flat tax

JEL Classification: H2, O16, E5, G28

Suggested Citation

Bai, Chong-En and Li, David Daokui and Qian, Yingyi and Wang, Yijiang, Financial Repression and Optimal Taxation. Available at SSRN: https://ssrn.com/abstract=255282

Chong-En Bai (Contact Author)

The University of Hong Kong - School of Economics and Finance ( email )

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Kennedy Town
Hong Kong
(852) 2859-1036 (Phone)
(852) 2548-1152 (Fax)

University of Michigan - William Davidson Institute ( email )

724 E. University Ave.
Wyly Hall
Ann Arbor, MI 48109-1234
United States

David Daokui Li

Hong Kong University of Science & Technology (HKUST) - Department of Economics ( email )

Clear Water Bay
Kowloon, Hong Kong
China
(852) 2358-7610 (Phone)
(852) 2358-2084 (Fax)

HOME PAGE: http://home.ust.hk/~davidli

Yingyi Qian

Tsinghua University - School of Economics & Management

Beijing, 100084
China

Centre for Economic Policy Research (CEPR)

London
United Kingdom

Yijiang Wang

University of Minnesota - Twin Cities - Carlson School of Management ( email )

321 19th Avenue South
Industrial Relations Center
Minneapolis, MN 55455
United States
612-624-6814 (Phone)
612-624-8360 (Fax)

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