Back Matter

Back Matter

Editor(s):
Vito Tanzi
Published Date:
June 1984
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    INDEX

    Author Index

    A

    • Aaron, Henry, 87, 93

    • Alamouti, Kaveh, 140

    • Aliber, Robert Z., 102, 108, 220, 234

    • Arak, Marcelle, 87, 90, 93

    • Auerbach, Alan J., 92, 93

    B

    • Ball, R.J., 76, 79–80, 93

    • Ben-Zion, Uri, 4, 64, 69–98, 99–109, 104, 105, 106, 108, 172, 205, 219, 220, 234

    • Blejer, Mario I., 3, 31, 104, 105, 106, 204–19, 205, 219, 220

    • Blinder, Alan S., 122, 126, 140

    • Box, George E.P., 129, 140

    • Bulow, Jeremy I., 90, 96

    • Byrne, William J., 10, 64

    C

    • Callier, Philippe, 101, 108

    • Carlino, Gerald A., 179, 202

    • Carlson, John A., 77, 93, 164, 171

    • Carr, Jack, 69, 80, 93

    • Cohn, Richard, 79, 96

    • Cornell, Bradford, 101, 108

    • Criswell, Andrew R., 125, 140

    • Cukierman, Alex, 116

    D

    • Darby, Michael R., 64, 70, 73, 74, 75, 77, 93, 104, 108, 112, 140, 144, 173, 185, 202, 204, 207, 219, 223, 234

    • Davidson, Sidney, 90, 93

    • Dooley, Michael P., 102, 108

    • Dornbusch, Rudiger, 170, 171

    E

    • Engel, C., 128, 140

    F

    • Fabricant, Solomon, 90, 93

    • Fama, Eugene F., 77, 79, 81, 93, 114, 117, 120, 140, 179

    • Feldstein, Martin S., 64, 70, 73, 74, 75, 77, 78–79, 84, 88, 89, 91, 94, 108, 112, 122, 126, 140–41, 144, 173, 185, 202

    • Fischer, Stanley, 122, 126, 140, 170, 171

    • Fisher, Irving, 72, 76, 83, 94, 110, 141, 172, 202

    • Frankel, Jeffrey A., 174, 180, 182, 202, 224, 234

    • Frenkel, Jacob A., 102, 108, 128, 140, 164, 167, 220, 234

    • Friedman, Benjamin M., 82, 94, 164, 171

    G

    • Gandhi, Ved P., 3

    • Gandolfi, Arthur E., 64, 74, 75, 185, 202, 204, 219

    • Gibbons, Michael, 114, 140

    • Gibson, William E., 69, 77, 94

    • Goldfeld, Stephen M., 159, 171

    • Gonedes, Nicholas J., 90, 91, 94

    • Grossman, Jacob, 128, 141

    H

    • Hansen, Lars P., 101, 108

    • Hartman, David G., 64, 104, 105, 106, 108, 116, 141, 205, 219, 221, 234

    • Hartzmark, Michael, 87, 97

    • Hendershott, Patric H., 88, 94

    • Hodjera, Zoran, 220, 234

    • Hodrick, Robert J., 101, 108

    • Howard, David H., 64, 105, 106, 108, 205, 219, 221, 234

    • Hu, Sheng Cheng, 88, 94

    I

    • Iden, George, 89, 98

    • Isard, Peter, 102, 108

    J

    • Jenkins, Gwilym, 129, 140

    • Johnson, Harry, 159

    • Johnson, Karen H., 64, 105, 106, 108, 205, 219, 221, 234

    • Joines, Douglas H., 87, 95

    K

    • Kama, Kunio, 81, 95

    • Kami, Edi, 72, 95

    • Karnosky, Denis S., 77, 98

    • Katz, Menachem, 3, 24, 25, 172–203, 220–34, 223, 224

    • Kesselman, Jonathan, 109

    • Keynes, John Maynard, 17, 172, 202

    • Khan, Mohsin S., 126, 134, 141

    • Kopits, George F., 14, 64

    L

    • Lahiri, Kajal, 64, 69, 164, 171, 179, 202

    • Laidler, David E.W., 159, 167, 171

    • Landskroner, Yoram, 90, 95

    • Leiderman, Leonardo, 81, 95

    • Levi, Maurice D., 65, 70, 75–76, 77, 84,95, 103–104, 106, 109, 111, 120, 134, 141, 173, 186, 202, 205, 213, 219, 221, 225, 227, 229, 234

    • Levich, Richard M., 101, 102, 108, 109, 220, 234

    • Levy, Haim, 90, 95

    • Livingston, Joseph, 77, 115, 118

    • Lutz, Friedrich A., 72, 95

    M

    • Macrae, C. Duncan, 89, 95

    • Makin, John H., 3, 23, 43, 65, 70, 75–76, 77, 78, 79, 82, 84, 95, 110–42, 111, 114, 115, 116, 120, 121, 126, 128, 133, 134, 137, 141, 173, 182, 186, 202, 204, 219

    • Mandelker, Gershon, 81, 96

    • Miles, James A., 204, 219

    • Mishkin, Frederic S., 120, 126, 128, 141

    • Modi, Jitendra R., 3, 65, 186, 202, 205, 219, 234

    • Modigliani, Franco, 79, 96, 170

    • Mundell, Robert A., 16, 65, 71, 72, 120, 142, 173, 202

    • Mutén, Lief, 3

    N

    • Nelson, Charles R., 77, 81, 96, 120, 142

    • Neumann, Manfred J.M., 80, 81, 96

    • Nielsen, Niels Christian, 65, 75, 96, 174, 186, 188, 202

    • Nowotny, Ewald, 65, 87, 96

    O

    • Otani, Ichiro, 102, 109

    P

    • Pearson, Edward F., 89, 98

    • Peek, Joe, 120, 139, 142, 204, 219

    • Piper, A.G., 89, 96

    R

    • Roley, V. Vance, 128, 142

    • Roll, Richard, 77, 96, 104, 109, 204, 219

    S

    • Sandmo, Agnar, 90, 96

    • Sargent, Thomas J., 65, 70, 76, 77, 96

    • Schoenfeld, Hanns-Martin W., 89, 96

    • Schultz, Henry, 136, 142

    • Schwert, G. William, 77, 81, 96, 120, 142

    • Shoven, John B., 90, 96

    • Siebke, Juergen, 97

    • Slemrod, Joel, 88, 89, 94

    • Solnik, Bruno, 104, 109, 204, 219

    • Stein, Jerome L., 100, 102, 109

    • Steuerle, Eugene, 65, 87, 97, 186, 203

    • Stiglitz, Joseph E., 89, 97

    • Stoll, Hans R., 102, 109

    • Strömberg, Dorothea, 90, 97

    • Summers, Lawrence H., 65, 75, 78–79, 84–85, 91, 94, 97, 122, 129, 141, 142, 174, 176, 203

    T

    • Tandon, Kishore, 81, 96

    • Tanzi, Vito, 3, 19, 20, 23, 28, 43, 65, 66, 70, 73, 74, 77, 79, 82, 84, 85, 87, 88, 89, 97–98, 104, 105, 106, 109, 110–42, 111, 112, 120, 122, 128, 133, 142, 143–58, 159–71, 160, 161, 164, 166, 167, 171, 173, 179, 182, 185, 203, 204, 205, 207, 219, 223, 234

    • Taylor, Herbert, 98

    • Thornton, Henry, 72, 98, 203

    • Tiwari, Siddharth, 102, 109

    • Tobin, James, 16, 66, 72, 98, 173, 203

    V

    • Vasarhelyi, Miklos A., 89, 98

    W

    • Wachtel, Paul, 116

    • Walsh, Carl E., 82, 98

    • Weil, Roman, 90, 93

    • Weinblatt, J., 104, 105, 106, 108, 205, 219, 220, 234

    Y

    • Yezer, Anthony M.J., 89, 95

    • Yitzhaki, Shlomo, 89, 94

    • Yohe, William P., 77, 98

    Subject Index1

    A

    • Argentina, 81

    • Australia, 6, 9, 11

      • tax deductibility of interest expense, 59t

      • tax treatment of interest income, 52t, 62t

    • Austria, 6, 9, 13

      • tax deductibility of interest expense, 59t

      • tax treatment of interest income, 52t, 62t

    • autoregressive models for inflation, 78–79, 129, 132

    B

    • Belgium, 6, 9, 10, 12, 13

      • tax deductibility of interest expense, 59t

      • tax treatment of interest income, 53t, 62t

    • borrowers

      • borrowing schedules, 50–51

      • tax-exempt, 7, 9–10, 21–22

      • taxes on, 21, 27–29, 36, 47, 73, 143–55, 152

    C

    • Canada, 6, 9, 11, 12, 13, 24, 25, 26, 32, 80, 102, 103, 176, 177, 182, 183, 185, 186, 187, 189, 190, 208, 221, 222, 223, 225, 226, 229

      • effective tax rates, 201t

      • frequency of abnormal capital flows, 227t

      • impact of taxation on adjustment of interest rates to inflation, 25t

      • interest rate response to inflation, 176t, 178t, 181t, 184c, 188t, 191t, 192t, 193t, 195t, 197t, 198t, 199t, 200t, 225t, 231t, 232t, 233t

      • tax deductibility of interest expense, 59t

      • tax treatment of interest income, 53t, 62t

    • capital flows

      • and monetary restraint, 35–36

      • arising from interest rate differentials, 221–25

      • direction of, 225–29

      • financial market taxation and, 204–18

      • frequency of abnormal, between United States and seven industrial countries, 227t

      • impact of taxation on, 220–30

      • inflation adjustment and, 28, 210–18

      • in industrial countries, 229–30, 227t

      • international, 3–4, 9, 15, 22, 32, 62t–63t, 204–18, 220–30

      • international financial markets, 99–107, 204–18, 220–30

      • tax treatment of international flows of interest income in industrial countries, 62t–63t, 208–16

      • taxes and, 5, 7–8, 22, 99–107, 204–18

    • capital gains and losses

      • and interest income, 48, 222–29

      • tax treatment of, 7, 11–12, 13, 21, 24, 39, 75, 88–92, 102–103, 186–88, 208, 222–29

    • closed economy

      • impact of taxation and inflation on interest rates, 69–86

      • impact of inflation on income tax, 87–92

    • corporation tax, 12–13, 14, 21, 45, 47, 78, 84–92, 151, 187

    D

    • demand for money

      • and inflationary expectations, 159–70

      • and taxes, 159–70

      • equations, 165t, 166–70, 169t

      • in United States, 159–70

      • theories of, 4, 160–64, 166–70

    • Denmark, 6, 9, 11, 12, 13, 15

      • tax deductibility of interest expense, 59t

      • tax treatment of interest income, 53t, 62t

    • determination of interest rates

      • required rates for United States, 145–49, 148t

      • theories of, 4, 22, 24, 39, 50–51, 72–73, 172–73

    E

    • empirical tests, 76–78, 128–34, 174

    • equations

      • demand-for-money, 165t, 166–70, 169t

      • Fisher (see Fisher’s theory of interest)

      • interest rate, 130t, 167t

    • Eurocurrency deposit rate, 180–81, 193t, 227, 227t, 228, 231

    • exchange rate behavior, 32–33, 208–16

    F

    • Feldstein-Summers effect, 125, 133

    • fiscal deficits

      • effect on interest rates, 18, 127

      • of United States, 27, 30, 38, 70, 126–27, 133, 138

      • tax deductibility and, 7, 30, 40

    • fiscal illusion, 70, 77–79, 111, 113

    • Fisher effect, 71, 72–79, 80, 87, 91, 104, 105, 106, 125, 173–75, 179, 182–83, 185–89, 204, 205, 214, 216, 223, 224

      • and interest rate determination, 72–73

      • changes over time in, 182–85

      • empirical tests of, in United

      • States, 76–79, 174

      • impact of taxation on, 73–75, 185–89

    • Fisher’s theory of interest, 6, 16, 20, 23, 24, 51, 69, 71, 72–79, 110, 112–13, 118, 119, 121–23, 128–29, 134, 137, 160–64, 172–73, 207, 209, 212, 222–23

      • effect of taxation on, 73–75

    • foreign exchange gains and losses and capital flows, 208–16, 223–30

      • and interest income, 48–49, 208–17, 224–29

      • and tax evasion, 208, 215–16

      • foreign tax credit, 10

      • tax treatment of, 6, 7, 12, 14, 31–34, 42, 78, 208–18, 224–29

    • France, 6, 9, 10, 11, 12, 13, 15, 24, 25, 26, 177, 181, 182, 183, 185, 186, 187, 188, 189, 190, 221, 222,228

      • effective tax rates, 201t

      • frequency of abnormal capital flows, 227t

      • impact of taxation on adjustment of interest rates to inflation, 25t

      • interest rate response to inflation, 176t, 178t, 181t, 184c, 188t, 191t, 192t, 193t, 194t, 195t, 196t, 197t, 198t, 199t, 200t, 225t, 231t, 232t, 233t

      • tax deductibility of interest expense, 59t

      • tax treatment of interest income, 53t, 62t

    • Frankel method, 174–75, 180, 182, 189, 224

    • Friedman effect, 76

    G

    • general equilibrium analysis, 75–81

    • Germany, Federal Republic of, 6, 9, 11, 12, 13, 14, 24, 25, 26, 80, 81, 102, 176, 177, 181, 182, 183, 185, 186, 187, 188, 189, 190, 208, 221, 228

      • effective tax rates, 201t

      • frequency of abnormal capital flows, 227t

      • impact of taxation on adjustment of interest rates to inflation, 25t

      • interest rate response to inflation, 176t, 178t, 181t, 184c, 188t, 191t, 192t, 193t, 194t, 195t, 196t, 197t, 198t, 199t, 200t, 225t, 231t, 232t, 233t

      • tax deductibility of interest expense, 59t

      • tax treatment of interest income, 54t, 62t

    I

    • Iceland, 26

    • income

      • adjusted gross income, U.S., 146–58, 147t, 149t, 153t, 154t, 156t, 157t

      • business income, 89–92

      • capital income, forms of, 9

      • income classes, U.S., 146–58

      • tax incidence in United States, 149–55

      • tax treatment of, 9, 146–58, 204–18

    • income tax

      • and inflation effects on interest rates, 19–22, 110–58

      • brackets, 8, 12–13, 14, 32, 36, 39

      • efficiency of collection, 8

      • impact of inflation on, 6, 8, 12–16, 87–92

      • incidence on interest income in United States, 143–58, 226–30

      • in United States, 110–58, 147t, 149t, 154t

      • on assets, 21

      • on borrowers, 21

      • on business profits, 45, 89–92

      • personal income tax, 12, 87–89

      • ratio of taxes to adjusted gross income, 147t

      • systems in industrial countries, 6, 9–14, 12–16, 224–30

      • tax incentives relating to, 8, 13

    • industrial countries

      • adjustment, speed of, 193t

      • capital flows, 220–30, 227t

      • death duties, 46

      • depreciation, 13, 28, 32–34, 122

      • effective tax rates, 6, 12–14, 201t

      • financial markets, 99–107

      • impact of taxation on adjustment of interest rates to inflation, 172–201, 188t, 221–25

      • income tax systems, 6, 9–14, 87–92

      • inflation adjustment of income tax in, 12–16

      • interest rate response to inflation, 24–30, 25t, 79–81, 176t, 178t, 181t, 184c, 191t, 192t, 193t, 194t, 195t, 196t, 197t, 198t, 199t, 200t, 225t, 231t, 232t, 233t

      • interrelationships of interest rates, taxation, and inflation, 5, 25t, 75–81, 172–201, 220–30, 225t, 231t, 232t, 233t

      • long-term interest rates and inflation in, 195t, 196t, 225t, 232t, 233t

      • monetary restraint, 35–36

      • net wealth taxes, 46

      • short-term interest rates and inflation in, 176t, 178t, 181t, 191t, 192t, 194t, 197t, 198t, 199t, 200t, 225t, 231t, 232t

      • studies on relationship between interest rates and inflation, 79–81

      • tax provisions, 3, 9–30, 31–36, 159–70

      • tax treatment of foreign exchange gains and losses, 6, 9–16, 31–34, 208–16

      • tax treatment of interest expense, 6, 7, 9–14, 31–34, 39–41, 59t–61t, 186–89

      • tax treatment of interest income in, 7, 9–14, 31–34, 39–41, 52t–58t, 62t–63t, 186–89, 208–16

      • tax treatment of international flows of interest income, 62t–63t, 220–30

      • United States and seven industrial countries, 225t, 227t, 231t, 232t, 233t

      • (See also individual countries.)

    • inflationary expectations

      • expected inflation, behavior of, 6, 8, 16–17, 19–21, 23–25, 110–39, 114–19, 176–82, 206–18, 225t, 231t, 232t, 233t

      • in industrial countries, 172–89, 181t, 194t, 196t

      • in United States, 159–70, 181t, 194t, 196t

      • Livingston series of, 77, 115, 118, 164, 165, 175, 179

    • inflation effects on interest rates, 15–30, 19, 37–38, 110–39, 172–201, 225–33

      • and capital flows, 22

      • economic activity effect, 17

      • fiscal deficits, 18, 126–27

      • in eight industrial countries, 172–201, 176t, 178t, 181t, 188t, 191t, 192t, 194t, 195t, 196t, 197t, 198t, 199t, 200t, 225t, 231t, 232t, 233t

      • institutional constraints, 17

      • in United States, 110–39, 225t, 231t, 232t, 233t

      • liquidity effects, 8, 17, 80, 174

      • money illusion effect, 18, 77–79

      • regression of interest rates on inflation, 176t

      • response of interest rates to inflation, 176t, 178t, 181t, 184c, 188t, 191t, 192t, 193t, 194t, 195t, 196t, 197t, 198t, 199t, 200t, 225t, 231t, 232t, 233t

      • uncertainty effect, 18, 115, 134

      • with income tax, 19–22

      • without income tax, 16–18

    • interest expense

      • and adjusted gross income, 146–58, 147t, 149t, 153t, 154t, 156t, 157t

      • business-related payments, 11

      • consumer loans, 6, 11, 15, 29–30, 47

      • depreciation, 13, 21, 28, 32, 33–34, 90–92, 122

      • inflation adjustment of, 7–8, 12–14, 26–30

      • in United States, 143–58, 147t, 149t, 153t, 154t

      • inventory accounting, 13, 21, 28, 90

      • mortgage payments, 6, 10, 11, 15, 29–30, 47, 186

      • nonbusiness-related payments, 7

      • of nonresidents, 10, 12, 14

      • tax deductibility of, 3–4, 7, 10–11, 14, 28–30, 46–48, 59t, 155–57

      • tax treatment of, 3, 6, 7, 9-14, 15–30, 31–34, 36–37, 42, 43–49, 59t, 143–58, 153t, 154t, 186–87; in industrial countries, 59t

    • interest income

      • and adjusted gross income, 146–58, 147t, 149t, 153t, 154t, 156t, 157t

      • and capital gains, 48, 223–29

      • and foreign exchange transactions, 48–49, 208–16, 224–25

      • and income tax, 143–58, 226–30

      • bonds, 10, 11, 18, 44, 48, 151t, 152, 164, 206–16

      • death duties and, 46

      • dividends, 47–48

      • effect of inflation on, 5, 7–8, 12–14, 15–30, 26, 143–58

      • incidence of income taxes on, in

      • United States, 143–58

      • in United States, 143–58, 147t, 149t, 153t, 154t

      • net wealth taxes and, 46

      • of lenders, zero real, 148t, 150t

      • of nonresidents, 10, 12, 14, 45, 52t–58t, 105

      • tax-exempt, 9, 21, 22, 24, 44–46, 152

      • tax treatment of, 3, 7, 9–14, 15–34, 36–37, 42, 43–49, 52t, 62t, 143–58, 153t, 154t, 186–87, 208–18;

      • in industrial countries, 52t–58t, 62t–63t

      • withholding taxes on, 11, 15, 45

    • interest rate parity, 4, 31–34, 99–106, 102–106, 207–208, 210–11.213–16, 220, 222

      • and tax treatment of foreign exchange transactions, 210–11,213–16

      • and tax treatment of interest income,210–11, 213–16

    • international capital movements

      • analytical framework for influence of taxation on, 206–16

      • international financial market, 99–107 (See also capital flows.)

    • International Monetary Fund

      • activities of, 41–42

      • Articles of Agreement, 8, 41

      • Executive Board, 3–4, 37

    • Ireland, 6, 9, 12, 13

      • tax deductibility of interest expense, 59t

      • tax treatment of interest income, 54t, 62t

    • Italy, 6, 9, 10, 13, 14, 15, 24, 25, 26, 176, 177, 182, 183, 185, 186, 187, 189, 221

      • effective tax rates, 201t

      • frequency of abnormal capital flows, 227t

      • impact of taxation on adjustment of interest rates to inflation, 25t

      • interest rate response to inflation, 176t, 178t, 181t, 184c, 188t, 191t, 192t, 193t, 195t, 197t, 198t, 199t, 200t, 225t, 231t, 232t, 233t

      • tax deductibility of interest expense, 59t

      • tax treatment of interest income, 54t, 62t

    • investments

      • after-tax return on, 3, 19, 21, 27, 50–51, 87–92

      • incentives for, 13, 21, 47, 74–75

      • income-generating, 47

      • institutional investors, 9, 22, 24, 44–46

      • loanable funds, 17, 18, 27, 50–51

      • of charities, 45

      • risk factor in, 18, 37, 100–101

    J

    • Japan, 6, 9, 10, 11, 13, 14, 15, 24, 25, 26, 39, 81, 102, 177, 181, 182, 183, 185, 186, 187, 188, 189, 190, 208, 221, 228

      • effective tax rates, 201t

      • frequency of abnormal capital flows, 227t

      • impact of taxation on adjustment

      • of interest rates to inflation, 25t

      • interest rate response to inflation, 176t, 178t, 181t, 184c, 188t, 191t, 192t, 193t, 194t, 195t, 196t, 197t, 198t, 199t, 200t, 225t, 231t, 232t, 233t

      • tax deductibility of interest expense, 59t

      • tax treatment of interest income, 55t, 62t

    K

    • Keynesian assumption, 17, 160, 172, 202

    L

    • lenders

      • interest income, 148t, 150t, 151

      • interest rates required for zero real interest income, 148t, 150t

      • investments, 3, 19, 21, 27, 47

      • lending schedules, 18, 32, 50–51

      • taxes on, 27–28, 36, 143–55

      • tax-exempt, 7, 9–10, 21–22

    • level of interest rates, 3–4, 15–30, 50–51, 110–39

      • expression for, 51

      • in United States, 38t, 110–39

    • literature

      • on impact of taxation and inflation on interest rates, 69–98

      • on impact of taxation and inflation on the international financial market, 99–109

      • (See also Author Index.)

    • Livingston series of price expectations, 77, 115, 118, 164, 165, 175, 179, 180

    M

    • monetary restraint

      • effect of, 8, 15–30

      • policies of, 3, 34–37

    • money illusion, 18, 144, 173

    • money markets, 43, 204–18, 225–29

    • money supply, 17

    • money surprises, 125–27

    • Mundell real balance effect, 16–17, 70–71, 74, 83, 120, 125, 173, 222, 224

    • Mundell-Tobin effect, 16–17, 72, 83, 120, 121, 125, 133, 173, 218

    N

    • Netherlands, 6, 9, 11, 12, 13, 15, 24, 25, 26, 177, 181, 182, 183, 186, 187, 188, 189, 190, 208, 221

      • effective tax rates, 201t

      • frequency of abnormal capital flows, 227t

      • impact of taxation on adjustment of interest rates to inflation, 25t

      • interest rate response to inflation, 176t, 178t, 181t, 184c, 188t, 191t, 192t, 193t, 194t, 195t, 196t, 197t, 198t, 199t, 200t, 225t, 231t, 232t, 233t

      • tax deductibility of interest expense, 59t

      • tax treatment of interest income, 55t, 62t

    • Nielsen model, 186, 188

    • Norway, 6, 9, 11, 15

      • tax deductibility of interest expense, 59t

      • tax treatment of interest income, 55t, 63t

    O

    • open economy, 78, 84–85

      • effects on international capital movements in, 99–106, 207–208, 220–27

    P

    • Park-Glejser test, 132

    • Philips effect, 76

    • prices

      • and interest rates, 172–73

      • bonds, 164

      • consumer price index, U.S., 119t, 145–46

      • expected future, 115c, 117c

      • Livingston series of price expectations, 77, 115, 118, 164, 165, 175, 179, 180

    • purchasing power parity, 4, 104–105,209–10,212–13,215–16, 217, 220, 222

      • and tax treatment of foreign exchange

      • transactions, 209–210, 212–13

      • and tax treatment of interest income, 209–10, 212–13

      • with taxation and inflation, 102–106

    R

    • real balance effect, 16, 70–71, 74, 83, 120, 125, 173, 222, 224

    • research, agenda for, 85–86, 106–107

    S

    • savings

      • effect of inflation on, 18

      • returns on, 3, 125

    • Sweden, 6, 9, 11, 13, 15

      • tax deductibility of interest expense, 59t

      • tax treatment of interest income, 55t, 63t

    • Switzerland, 6, 9, 11, 13, 15

      • tax deductibility of interest expense, 59t

      • tax treatment of interest income, 56t, 63t

    T

    • tax avoidance

      • tax allowances, 5

      • tax deferrals, 5, 44–45

    • tax effects on interest rates, 5, 6, 7–8, 15–30, 24, 26, 125, 163t

      • adjustment to inflation, 99–107, 110–39, 172–201

      • expected real interest rate, behavior of, 119–28, 175

      • in eight industrial countries, 172–201, 188t, 201t

      • in United States, 110–39, 143–58, 148t, 150t, 151t, 153t, 154t, 156t, 157t

      • taxes on borrowers, 21

      • taxes on other assets, 21

      • with income tax, 19–22

    • tax evasion, 22, 24, 45, 208, 215–16

    • tax havens, 7, 22, 45

    • Tobin substitution effect, 83, 120

    U

    • United Kingdom, 6, 9, 10, 11, 12, 13, 14, 15, 24, 25, 26, 32, 46, 79–80, 102, 175, 176, 177, 181, 182, 183, 185, 186, 187, 188, 189, 190, 208, 221, 222, 223, 226, 227, 229

      • effective tax rates, 201t

      • frequency of abnormal capital flows, 227t

      • impact of taxation on adjustment of interest rates to inflation, 25t

      • interest rate response to inflation, 176t, 178t, 181t, 184c, 188t, 191t, 192t, 193t, 194t, 195t, 196t, 197t, 198t, 200t, 225t, 231t, 232t, 233t

      • tax deductibility of interest expense, 59t

      • tax treatment of interest income, 56t, 63t

    • United States, 4, 6, 9, 11, 13, 14, 15, 22, 24, 25, 26, 27, 28, 30, 32, 37, 38, 39, 40, 43, 44, 46, 47, 50, 70, 71, 76–79, 82, 84, 87, 88, 90, 91, 92, 102, 103, 104, 105, 111–39, 143–58, 159–70, 174, 175, 176, 177, 181, 182, 183, 185, 186, 187, 188, 189, 190, 208, 221–25, 226–27, 228–30

      • adjusted gross income and taxation, 147t, 149t, 153t, 154t

      • and seven industrial countries, 225t, 227t, 231t, 232t, 233t

      • bond yields and interest rates, 151t

      • consumer price index, forecasts of, 119t

      • demand for money, 159–70

      • Economic Recovery Tax Act, 38, 84, 91, 92, 113, 133, 137–38

      • effective tax rates, 201t

      • Federal Reserve Board, 84, 119, 135, 139, 183

      • frequency of abnormal capital flows, 227t

    • Government, net balance, 155–58, 156t, 157t

    • impact of taxation on adjustment of interest rates to inflation, 25t

    • income tax, 87–88, 143–58, 226–30

    • inflation, 50, 110–39, 143–58, 159–70

    • interest rate response to inflation, 176t, 178t, 181t, 184c, 188t, 191t, 192t, 193t, 194t, 195t, 196t, 197t, 198t, 199t, 200t, 225t, 231t, 232t, 233t

    • tax deductibility of interest expense, 59t

    • Tax Equity and Fiscal Responsibility Act, 38

    • tax system, 76–92, 143–58, 159–70

    • tax treatment of interest income, 40, 44, 46, 47, 56t, 63t, 143–58, 148t, 150t, 153t, 154t, 220–30

    • tests of Fisher effect in, 76–79, 174

    • treasury bills, 118, 121c, 131t, 132c, 135t

    • volatility of interest rates, 38t, 82, 110–39

    V

    • velocity, monetary, 135–36

      • velocity growth surprises, 135t

    • volatility of interest rates, 8, 15–30, 37–39, 38t, 51, 82–83, 110–39

      • equations for, 51

      • in United States, 38t, 110–39

    Letters are used as follows: c for chart and t for table.

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