Ziramba, Emmanuel2008-10-272008-10-272008-06Gupta, R & Ziramba, E 2008, 'Costly tax enforcement and financial repression: a reconsideration using an endogenous growth model', University of Pretoria, Department of Economics, Working paper series, no. 2008-20. [http://web.up.ac.za/default.asp?ipkCategoryID=736&sub=1&parentid=677&subid=729&ipklookid=3]http://hdl.handle.net/2263/7672Using a monetary endogenous growth overlapping generations model characterized by financial repression, purposeful government expenditures and costly tax enforcement, we analyze whether financial repression can be explained by the cost involved in raising taxes. Note financial repression is modeled via high obligatory reserve requirements that banks in the economy need to hold. We show that higher costs of tax collection produces a monotonic increase in reserve requirements. Moreover, the government tends to rely more on indirect taxation, compared to direct taxation, as costs of tax collection increases.enUniversity of Pretoria, Department of EconomicsCostly tax enforcementFinancial repressionOverlapping generations modelTaxationEndogenous growth (Economics)Working Paper