This paper uses a multi-methodological approach to measure the fiscal costs of monetary and exchange rate policy distortions in Zimbabwe. It identifies three channels through which these policy distortions affect tax revenue: the Olivera-Tanzi Effect (inflation-related tax payment lags), an overvalued official exchange rate affecting customs duty on imports, and informalization undermining overall revenue collection. It then measures the fiscal costs...
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2025/02/25
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2025/02/26
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The Fiscal Costs of Monetary and Exchange Rate Policy Distortions in Zimbabwe
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