Role of monetary policy in economic growth and development: from theory to empirical evidence

PurposeThis article examines the effects of credit to private sector on the business and trade activities. The effectiveness of rapid expansion in public and private borrowing through state's intervention after COVID-19 pandemic has been assessed in this study.Design/methodology/approachThe model to determine the role of credit expansion is based on four equations estimated through panel least square technique on 18 years data of 186 countries.FindingsIt is concluded that credit to private sector and external debt improve the investment in infrastructure, which is a significant determinant of gross domestic product growth. Empirical evidences corroborate that higher number of firms using banks to finance their investment and the volume of broad money determine the magnitude of credit to private sector.Originality/valueThis study explores some new evidences and aspects of the credit financing which have not been discussed in this way before.

Facing or retreating? Evaluating the impact of fiscal pressure and the selection preference of tax efforts among Chinese local government

As China's economy enters a new era, fiscal pressure is growing rapidly. How will local governments determine their tax efforts under pressure? Facing or retreating? This paper selects macro data of 30 provincial administrative regions from 2000 to 2018, using instrumental variable method and threshold regression model, while, putting fiscal pressure, land-transferring fees, local government debt and transfer payments into the same regression equation to test the causal relationship between fiscal pressure and local tax efforts. We found that local governments will choose to raise tax efforts under fiscal pressure. Moreover, the heterogeneity analyses prove that eastern local governments prefer higher tax efforts. When the growth rate of tax and economy is low, local governments have less motivation to strengthen tax collection and administration. Threshold regression tests show that transfer payments have a moderating effect on local tax efforts, and transfer payments has a threshold effect. When the transfer payments are under the minimum threshold value or above the maximum threshold value, it may lead to inaction of local governments, who do not try their best to raise tax efforts. These findings are valuable in policy making for the construction of sustainable public finance.

Tax Obedience in Covid-19 Times: The Case of Israel

Across the world, economic crises present major challenges for governments. In particular, tax agencies encounter emerging compliance problems which in turn adversely affect the economy. In this context, this study aims to explore Israeli taxpayers' willingness to pay tax in the short term, at the beginning of the Covid-19 pandemic. Responses to an anonymous questionnaire reflect a statistically significant correlation between the unwillingness to pay tax and the economic crisis emanating from Covid-19, stronger among citizens who usually avoid paying taxes than those who are usually prompt. It further reflects a link between the willingness to pay taxes and credit shortage, and also that government's reluctance to help the business community during the crisis may reinforce tax avoidance.

Importancia de las estrategias en las Obligaciones Tributarias frente a la Emergencia Sanitaria Covid-19 en Pymes de Cuenca, Ecuador

Ecuador has among its main revenue taxes;however, tax compliance represents a divergence between the state objective of collecting taxes for public investment and people’s willingness to avoid paying taxes. Due to the health crisis caused by Covid-19, tax collection decreased, public debt rose and GDP declined, during this crisis the government decreed, in March 2020, several measures that prevented companies from carrying out their activities normally, facing a weak economy in the process of reactivation. The objective was to analyze the importance of tax compliance for the country and the panorama of SMEs in the city of Cuenca in the context of the Covid-19 global pandemic, considering their income, sources of employment, and income tax caused from the periods 2016 to 2020. For the study, a methodology with a mixed approach was used, descriptive scope from a non-experimental and longitudinal design of group evolution in the SMEs of the canton Cuenca-Ecuador, whose result shows the impact of the pandemic in the first year leading to confinement and strong restrictions such as free movement were imposed, which brought about the socioeconomic effect that affected a third of the population. Therefore, a proposal of generic strategies was established to support tax obligations in order to avoid penalties and strengthen the contribution to the country.Alternate :Ecuador tiene entre sus principales ingresos los impuestos, sin embargo, el cumplimiento tributario representa divergencia entre el objetivo estatal de recaudar impuestos para la inversión pública y la disposición de las personas de obviar el pago de impuestos. Debido a la crisis sanitaria provocada por el Covid-19 la recaudación tributaria decreció, la deuda pública se elevó y el PIB declinó, durante esta situación el gobierno decretó, en marzo del 2020 varias medidas que impidieron a las empresas realizar sus actividades con normalidad, enfrentándose a una economía débil y en proceso de reactivación. El objetivo del presente estudio es analizar la importancia del cumplimiento tributario para el país y el panorama de las Pymes cuencanas en contexto de la pandemia mundial Covid-19, considerando sus ingresos, fuentes de empleo e impuesto a la renta causado de los periodos 2016 al 2020. Para el estudio se empleó una metodología con enfoque mixto, alcance descriptivo desde un diseño no experimental y longitudinal de evolución de grupo en las Pymes del cantón Cuenca (Ecuador), cuyo resultado se desprende el impacto de la pandemia en el primer año llevando al confinamiento y se impusieron fuertes restricciones como la libre circulación, lo que trajo consigo el efecto socioeconómico que afectó a un tercio de la población. Por lo cual, se estableció una propuesta de estrategias genéricas que apoyen a las obligaciones tributarias a fin de que su cumplimiento sea de manera apropiada evitando sanciones y a su vez se fortalezca la contribución al país.Alternate :O Equador tem entre seus principais impostos de renda, no entanto, o cumprimento fiscal representa uma divergência entre o objetivo do Estado de cobrar impostos para investimentos públicos e a vontade das pessoas de evitar o pagamento de impostos. Devido à crise de saúde causada pelo Covid-19, a arrecadação de impostos diminuiu, a dívida pública aumentou e o PIB diminuiu. Durante esta situação, o governo decretou, em março de 2020, várias medidas que impediram as empresas de realizar suas atividades normalmente, enfrentando uma economia fraca no processo de reativação. O objetivo deste estudo é analisar a importância do cumprimento fiscal para o país e as perspectivas para as PMEs em cuenca no contexto da pandemia global Covid-19, considerando sua renda, fontes de emprego e imposto de renda para os períodos de 2016 a 2020. Para o estudo foi utilizada uma metodologia com abordagem mista, de escopo descritivo a partir de um desenho não experimental e longitudinal da evolução do grupo nas PMEs do cantão Cuenca (Equador), cujo resultado mostra o imp cto da pandemia no primeiro ano que levou ao confinamento e foram impostas fortes restrições como a livre circulação, o que trouxe consigo o efeito socioeconômico que afetou um terço da população. Portanto, foi estabelecida uma proposta de estratégias genéricas para apoiar as obrigações fiscais a fim de garantir o cumprimento adequado, evitar penalidades e reforçar a contribuição para o país. Traduzido com a versão gratuita do tradutor - www.DeepL.com/Translator O Equador tem entre seus principais impostos de renda, no entanto, o cumprimento fiscal representa uma divergência entre o objetivo do Estado de cobrar impostos para investimentos públicos e a vontade das pessoas de evitar o pagamento de impostos. Devido à crise de saúde causada pelo Covid-19, a arrecadação de impostos diminuiu, a dívida pública aumentou e o PIB diminuiu. Durante esta situação, o governo decretou, em março de 2020, várias medidas que impediram as empresas de realizar suas atividades normalmente, enfrentando uma economia fraca no processo de reativação. O objetivo deste estudo é analisar a importância do cumprimento fiscal para o país e as perspectivas para as PMEs em cuenca no contexto da pandemia global Covid-19, considerando sua renda, fontes de emprego e imposto de renda para os períodos de 2016 a 2020. Para o estudo foi utilizada uma metodologia com abordagem mista, de escopo descritivo a partir de um desenho não experimental e longitudinal da evolução do grupo nas PMEs do cantão Cuenca (Equador), cujo resultado mostra o impacto da pandemia no primeiro ano que levou ao confinamento e foram impostas fortes restrições como a livre circulação, o que trouxe consigo o efeito socioeconômico que afetou um terço da população. Portanto, foi estabelecida uma proposta de estratégias genéricas para apoiar as obrigações fiscais a fim de garantir o cumprimento adequado, evitar penalidades e reforçar a contribuição para o país.

The Fiscal Impact of the COVID-19 Pandemic on Subnational Governments: The Case of Russia

This paper examines the fiscal consequences of the COVID-19 pandemic for subnational governments. In particular, we study how the pandemic affected the Russian regions in terms of budget revenues, expenditures, and federal transfers. We use a novel dataset and compare various monthly fiscal measures in 2020 prior to and during the pandemic to the corresponding measures in 2019, conditioning on regional actions in response to the pandemic, the health impact of the pandemic, and the potentially relevant regional characteristics. We document that small business tax collections declined the most in response to the pandemic-related restrictions, while unconditional discretionary transfers and health care expenditures rose the most. Also, we find that tax collections are positively associated with population mobility, controlling for the restrictions, suggesting that tax revenues were inversely affected by the degree of compliance with the restrictions. Finally, we outline some policy implications for the design of fiscal federalism and directions for future research.

Property Tax Assessments, Collections, and Revenue Performance in Economic Downturns: An Examination of Large American Cities

As state and local governments plunged into budget crises caused by the loss of sales, income, and other tax revenues in 2020, this study presents an examination of the Great Recession's effects on property tax collections in large American cities. Herein we explore the interactions between property tax components and key socioeconomic indicators in urban economies. In particular, we report how changes in house prices, household incomes, and employment affect the interactions among assessed values, levies, tions, and tax revenues. The stylized model we develop presents how, through property tax levies, valuations, and collection rates, property tax revenues are impacted. To correct for endogeneity among the variables, we use seemingly unrelated regressions and three-stage least squares estimators. The dataset includes financial indicators for the 147 largest American cities collected from 2003-2012. Results show that during recessions, declining house prices reduce assessed valuations, and reduced tax collection rates further compound this negative fiscal effect. The inelastic response of tax revenues to assessed values suggests that jurisdictions take back the difference by re-setting millage rates. Because each part of the levying and collecting process is very sensitive to the economic environment, revenue estimation for large cities becomes more difficult during recessions. OHLA