01655cas a2200253 a 4500 AALejournalIMF008899 230101c9999 xx r poo 0 0eng d 5.00 USD 9781451862263 1018-5941 BD-DhAAL BD-DhAAL Tanner, Evan. The Perils of Tax Smoothing : Sustainable Fiscal Policy with Random Shocks to Permanent Output / Evan Tanner, Kevin Carey. Washington, D.C. : International Monetary Fund, 2005. 1 online resource (32 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 If permanent output is uncertain, tax smoothing can be perilous: both debt levels and tax rates are difficult to stabilize and may drift upwards. One practical remedy would be to target the debt. However, our simulations confirm that such a policy would require undesirably volatile fiscal adjustments and may inhibit countercyclical borrowing. An alternative would be to link the primary surplus not only to the debt ratio (like tax smoothing) but also to its volatility, thus preempting further adjustments while gradually reducing the debt. Mode of access: Internet Carey, Kevin. IMF Working Papers; Working Paper ; No. 2005/207 Full text available on IMF http://elibrary.imf.org/view/journals/001/2005/207/001.2005.issue-207-en.xml IMF e-Library