Tax Reform in the Baltics, Russia, and Other Countries of the Former Soviet Union

This paper provides an overview of the recent revenue performance in the Baltics, Russia, and other countries of the former Soviet Union, and a survey of these countries' efforts to modify tax policy in line with the needs of increasingly market-oriented economies and to increase the effectiveness of tax administration. It focuses principally on the 12 countries of the CIS, but refers also to the Baltic countries, and addresses the period from 1995 to mid-1998, prior to the August 1998 financial crisis in Russia.

Broad Money Growth and Inflation in the United States

A U.S. inflation-forecasting model recently developed by the Federal Reserve--the so-called P* relationship--is analyzed. An innovation in that model is the significance of M2 velocity in predicting changes in inflation. However, this paper's empirical analysis indicates that an inflation equation in levels, rather than first differences, is more appropriate and reveals that the significance of M2 velocity is not robust to this alternative specification. Although there is a long-run relationship between M2 and the price level, the output gap in a Phillips curve model captures much of the short-run deviations from this relationship.

Revenue Implications of Trade Liberalization

The apparent contradiction between trade liberalization and continuing high trade tax revenue raises the important question of how, precisely, the one affects the other. Although policymakers generally recognize the long-term benefits of trade liberalization, some have argued for at least a slower pace, in part because of revenue concerns. This paper seeks to address these issues in three complimentary ways: through an overview of the factors that may have a bearing on the question, through a review of trends in trade tax revenue both globally and in selected countries, and through econometric analysis.