Inflation Debt and Fiscal Policy Attitudes.
Using a model of intertemporally optimizing households, this paper establishes that fiscal policy needs to be endogenous to preempt instability if one wishes to permit any combination of money and debt finance. Conservative governments enforce a greater margin of preemption than liberal governments. This distinction can generate very different short- and long-run effects on inflation when exogenous financial and fiscal policy variables are altered. Copyright 1987 by Royal Economic Society.
Year of publication: |
1987
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Authors: | Sheen, Jeffrey |
Published in: |
Oxford Economic Papers. - Oxford University Press. - Vol. 39.1987, 1, p. 90-110
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Publisher: |
Oxford University Press |
Saved in:
Online Resource
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