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Business and Economics > Production and Operations Management

You are looking at 1 - 2 of 2 items for :

  • Type: Journal Issue x
  • Incomes Policy; Price Policy x
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Cover IMF Working Papers
Optimal Taxation of Inflation
Damien Capelle
and
Yang Liu
When inflation originates from distributional conflicts, shifts in inflation expectations, or energy price shocks, monetary policy (MP) is a costly stabilization instrument. We show that a tax on inflation policy (TIP), which would require firms to pay a tax proportional to the increase in their prices, would effectively correct externalities in firms’ pricing decisions, tackle excessive inflation and reduce output volatility, without exacerbating price distortions. While proposals from the 1970s saw TIP as a substitute to MP, we find that it is a complement, with TIP addressing markups and inflation expectation shocks, and MP addressing demand shocks.
Keywords:
Inflation; Markup Shock; Monetary Policy; Tax on Inflation; Taxbased Incomes Policies; Externality; inflation expectation shock; excessive inflation; energy price shock; price distortion; Phillips curve; Output gap; Wage adjustments; Wages; Sticky prices; Western Europe
Cover IMF Staff Country Reports
Kingdom of Lesotho: Selected Issues
International Monetary Fund. African Dept.
This Selected Issues paper focuses on decomposing the public-private sector wage differential in Lesotho. Lesotho’s public wage bill is significantly higher than in other countries in the region. This paper takes a closer look at the civil service wage bill and examines public sector wage premium. It provides an overview of public sector employment and compensation, estimates, explores drivers of the wage premium between the public and private sectors, and conducts a decomposition of the public-private wage gap. The upward inertia in the public wage bill has been gradually crowding out all other government spending. Containing the wage bill is essential to ensure fiscal sustainability and improve income distribution. The upward inertia in the public wage bill has been gradually crowding out all other government spending. Containing the wage bill is essential to ensure fiscal sustainability and improve income distribution. Public sector employment should be reduced and managed using a combination of essential hiring, natural attrition, and staff redeployment.
Keywords:
wage distribution; wage premium; D. policy implication; private sector development; wage bill; Wages; Public sector wages; Government wage bill; Public sector; Civil service; Africa; Sub-Saharan Africa; Southern Africa; Global