From 1970 to 1985, Israel experienced high inflation. It rose in three jumps to new plateaus and eventually exceeded … of fallen bank shares caused the last big jump in inflation that occurred in October 1983. Bank shares had just collapsed …. Because that was foreseen, inflation immediately rose as predicted by the unpleasant monetarist arithmetic of Sargent and …

-oriented outcomes are time-inconsistent, since each government has an incentive to renege and levy a surprise inflation tax … therefore leads to excessive inflation and too low a level of real money balances. The reason is that a unilateral surprise … inflation tax induces a real depreciation and leads to inflation costs, but a multilateral expansion of monetary growth does not …

In contrast to the recent literature on the optimal inflation tax, we show that, in models where money reduces … transactions costs, it is optimal to set the inflation tax to zero when seigniorage is replaced by revenue from distortionary taxes …. The main reasons for this result are that the variable costs of supplying real balances are negligible and the inflation …

), (3) the inflation tax (the reduction in the real value of the stock of base money due to inflation and (4) the operating … inflation target, and the importance of cooperation and coordination between the Treasury and the Central Bank when faced with …

.0% of GDP. The maximal amount of seigniorage revenue that can be extracted at a constant rate of inflation is not far from … the recent historical value of less that 0.5% of GDP. Subtracting net public sector investment from the conventional … budget deficit is likely to overstate the government revenue producing potential of public sector investment. Public debt …

be held constant in the face of a domestic inflation. In this circumstance, import duties and export subsidies would have … in line with domestic inflation. Unless such a passive policy is accompanied by the elimination of trade barriers …

much sharper rise in inflation than measured by the official price indices, whose quality was called into question. In this … determinants. Since these data do not rely on official inflation statistics, they provide an independent check for the latter. We … not recorded by official inflation statistics. We do not find evidence in support of this hypothesis. …