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The fiscal gains from, and hence the political incentives to, an increase in inflation rate of ten percentage points may be substantial: with Swedish data from 1994, these gains would have been an annual real flow of 3-4 percent of GDP, or a capitalized value of nearly 100 percent of GDP. They...
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The fiscal gains from, and hence the political incentives to, an increase in inflation rate of ten percentage points may be substantial: with Swedish data from 1994, these gains would have been an annual real flow of 3-4 percent of GDP, or a capitalized value of nearly 100 percent of GDP. They...
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The optimal escape from a liquidity trap involves generating private-sector expectations of a higher future price level … and higher future inflation. This lowers the real interest rate and reduces the recession during the liquidity trap. The … optimal escape from a liquidity trap and make this credible.Optimal escape from a liquidity trap in a large economy does not …
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its currency and an exchange rate peg. This way, the central bank can implement the optimal escape from a liquidity trap … to escape from a liquidity trap …
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