The Effect of Political Variable on the Relationship between Seignorage and Income Inequality: the Case Study of Selected OECD and D8 Countries
Subject Areas : Labor and Demographic Economics
Vahid Taghinezhadomran
1
(Associate Professor of Economics, University of Mazandaran, Babolsar, Mazandaran, Iran.)
Zahra Mila Elmi
2
(Professor, Department of Economics, Mazandaran University, Babolsar, Mazandaran, Iran)
Mobin Ramezanpour
3
(Ma Student of Theoretical Economics, University of Mazandaran, Babolsar, Iran)
Keywords: income inequality, Seignorage, Political Variable,
Abstract :
The most important instrument of the government to finance public expenditures and to improve the distribution of tax revenues is tax. High reliance of government on seignorage can reduce the role of taxes in correcting the inequalities. Improving the political variable of the voice and accountability by less reliance on seignorage and more reliance on taxes can improve income distribution.The main purpose of this study is to investigate and test this hypothesis with the help of data from selected OECD and D8countriesperiod 2018-2008 using the fully modified least squares method (FMOLS). The results of model estimation showed that the political variables of accountability can improve the distribution of income in the studied countries by reducing the government's reliance on seignorage.
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