New ESM blog post
By Robert Kraemer, Silvia Calò and Kamila Slawinska.
No one likes too much inflation. It causes instability by changing prices, and what you buy costs more than it used to. Central banks strive to curb inflation to avoid harmful effects on households and businesses.
Inflation also has an impact on public coffers, mainly because it affects taxes on consumption, income, and wealth.
Last year’s record high inflation led to the fastest growth in tax revenue in the history of the euro area.
In this blog, we examine the implications of the “inflation tax” and how useful it was in lowering pressures on fiscal deficits.
In this blog, we examine the implications of the “inflation tax” and how useful it was in lowering pressures on fiscal deficits.
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