Aaron, Henry, 87, 93

Alamouti, Kaveh, 140

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

Arak, Marcelle, 87, 90, 93

Auerbach, Alan J., 92, 93

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

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

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

Engel, C., 128, 140

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

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

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

Iden, George, 89, 98

Isard, Peter, 102, 108

Jenkins, Gwilym, 129, 140

Johnson, Harry, 159

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

Joines, Douglas H., 87, 95

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

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

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

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

Otani, Ichiro, 102, 109

Pearson, Edward F., 89, 98

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

Piper, A.G., 89, 96

Roley, V. Vance, 128, 142

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

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

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

Vasarhelyi, Miklos A., 89, 98

Wachtel, Paul, 116

Walsh, Carl E., 82, 98

Weil, Roman, 90, 93

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

Yezer, Anthony M.J., 89, 95

Yitzhaki, Shlomo, 89, 94

Yohe, William P., 77, 98

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

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

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

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

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

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

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

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

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

Keynesian assumption, 17, 160, 172, 202

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

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

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

open economy, 78, 84–85

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

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

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

research, agenda for, 85–86, 106–107

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

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

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

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