01707cas a2200241 a 4500 AALejournalIMF001543 230101c9999 xx r poo 0 0eng d 5.00 USD 9781451921069 1018-5941 BD-DhAAL BD-DhAAL Choudhry, Nurun. Fiscal Revenue, Inflationary Finance and Growth / Nurun Choudhry. Washington, D.C. : International Monetary Fund, 1992. 1 online resource (30 pages) IMF Working Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students This paper analyzes the optimal rate of monetary expansion when government resorts to inflationary finance to generate additional investment for enhancing growth. If there are lags in tax collection, an increase in inflation erodes real fiscal revenue, thereby worsening the current balance while reducing government investment. This impedes capital accumulation as well as increases the welfare cost of inflation. As such, the optimal rate of monetary expansion, equilibrium capital-labor ratio and output are lower while the marginal cost of inflationary finance is higher than they would be without collection lags. Simulations are performed to highlight empirical implications. Mode of access: Internet IMF Working Papers; Working Paper ; No. 1992/023 Full text available on IMF http://elibrary.imf.org/view/journals/001/1992/023/001.1992.issue-023-en.xml IMF e-Library