This paper considers a central bank with a zero inflation target and a fiscal authority with a differing objective. Examples using calibrated models explore the consequences of the fiscal authority being aware of the central bank's objective. Situations in which the fiscal authority is able to...

This paper provides new estimates of the revenue elasticity of income taxes in the UK over the period 1989-2000. Observed changes in these elasticities are decomposed into changes due to inflation, real income growth, changes in fiscal structure, and changes in the dispersion of incomes in the...

In this paper the relationship between inflation and stock returns in Australia is examined. It is found that increases in the price level reduce the real level of the stock price index. However, it is also found that the questionof whether persistent increases in inflation affect real returns...

Research by Ghali (1999) tested for the existence of causality between wages and prices in United States' aggregate data using a multivariate cointegration framework. We show that Ghali's model is misspecified and that the correct specification leads to a different interpretation of the long-run...

This paper juxtaposes the policy trend towards price stability with the theoretical optimal quantity of money. After reviewing alternatives to the Friedman (1969) optimum, it focuses on the effect of costly nominal adjustment as a result of inflation.

This paper exemines the redistributional effect of price changes in Australia over the sixteen year period from 1980 to 1995.

Unit root and stationarity test suggest that shocks to quarterly US, Japanese and UK inflation are infinitely persistent. Recently developed test based on threshold autoregressions are used to distinguish between non-stationarity and non-linearity. The evidence suggests that inflation is well...

The paper formalizes a conflict in the use of credit. As compared to using costless fiat, the consumer's use of credit wastes resources by avoiding the inflation tax through a costly means of exchange. This inefficiency gives lattitude for a planner to increase welfare by restricting exchange...

In this paper we investigate the relationship between inflation and unemployment in Australia, post 1959. We focus on two features of the data: firstly, we find that forecasting models are surprisingly stable through our sample period. We also estimate the nonaccelerating inflation rate of...

This paper has two main aims, both associated with measuring the welfare effects of price changes. First, it examines the distributional effects of the change in the indirect tax system in New Zealand during the mid-1980s. Secondly, it examines the distributional impact of recent inflation in...