This paper concludes that, for many given government deficit, greater recourse to inflationary finance, financial repression and escessive government borrowing from abroad are associated with higher inflatio, lower saving ratios and lower growth rates.

This paper examines optimum inflation in the context of a positive requirement for government revenue, to be financed by distrotionary taxation, and a monetary system where bank deposits coexist with currency.

In a simple overlapping generations set-up, faster nominal money growth is found to squeeze labour and divert savings towards physical capital. Its net effect on both output and welfare is ambiguous. The main variable that can resolve these ambiguities is the profit share in income: the lower...

Using a two-country model of monetary union where policymakers minimize the continuous-time equivalent of a Barro-Gordon-type loss function, we examine the value of the option of monetary break-up when the national preference parameters associated with an inflationary surprise follow correlated...

Using a two-country model of monetary union, we derive the expected time and probability for any one country wanting to return to monetary independence when national inflation biases follow geometric Brownian motions.