Fiscal deficits and inflation

• 成果类型: Article
• 署名作者: Catao, LAV; Terrones, ME
• 署名单位: International Monetary Fund
• 刊物名称: JOURNAL OF MONETARY ECONOMICS
• ISSN/ISSBN: 0304-3932
• DOI: 10.1016/j.jmoneco.2004.06.003
• 发表日期: 2005
• 页码: 529-554
• 关键词: fiscal policy inflation; macroeconomic stabilization; Developing countries

摘要

Macroeconomic theory postulates that persistent fiscal deficits are inflationary. Yet empirical research has had limited success in uncovering this relationship. This paper reexamines the issue in light of broader data and a new modeling approach that incorporates two key features of the theory. Unlike previous studies, we model inflation as non-linearly related to fiscal deficits through the inflation tax base and estimate this relationship as intrinsically dynamic, using panel techniques that explicitly distinguish between short- and long-run effects of fiscal deficits. Results spanning 107 countries over 1960-2001 show a strong positive association between deficits and inflation among high-inflation and developing country groups, but not among low-inflation advanced economies. (c) 2005 Elsevier B.V. All rights reserved.