The economic characteristics of the COVID-19 crisis differ from those of previous crises. It is a combination of demand- and supply-side constraints which led to the formation of a monetary overhang that will be unfrozen once the pandemic ends. Monetary policy must take this effect into...

This paper investigates the validity of the hypothesis that suggests there is a link between fiscal deficits and inflation in developing countries and further explores this link in the absence of public sector wage expenditure. Sri Lanka, a developing country with a persistent fiscal deficit, a...

This paper studies the determination of the surpluses of the Brazilian central government. For quarterly data from 1996 through 2011, the empirical strategy included: i) structural break models and nonlinear estimates on the level of public debt, to handle the inertia after 1999, for high levels...

Brazil has had a long period of high inflation. It peaked around 100 percent per year in 1964, decreased until the first oil shock (1973), but accelerated again afterward, reaching levels above 100 percent on average between 1980 and 1994. This last period coincided with severe balance of...

This paper studies the determination of the surpluses of the Brazilian central government. For quarterly data from 1996 through 2011, the empirical strategy included: i) structural break models and nonlinear estimates on the level of public debt, to handle the inertia after 1999, for high levels...

Brazil has had a long period of high inflation. It peaked around 100 percent per year in 1964, decreased until the first oil shock (1973), but accelerated again afterward, reaching levels above 100 percent on average between 1980 and 1994. This last period coincided with severe balance of...

Despite accelerating debt levels, the real yield on U.S. Treasuries remains low due to investors' desire for their extreme safety and liquidity services. The convenience premium on Treasuries allows fiscal policy to pursue profligate budget plans without imposing inflationary threats on a...

We study sovereign bond yields in OECD countries with a dynamic panel by checking for cross-section dependence; assessing panel cointegration; and estimating panel error-correction models. The results show that markets consider budgetary and external imbalances and inflation as relevant...

For more than 25 years, the Social Security Trust Fund has been projected to run out of money in 2033 (give or take a few years), potentially causing benefits to be severely reduced in the absence of corrective legislative action. Today (February 2024), projections are made by the Social...

We explore the dynamics of inflation, inflation expectations, and seigniorage-financed fiscal deficits in Mexico. To do so, we estimate the model in Sargent, Williams, and Zha (2009) using Mexican CPI inflation data. This model features dual expected inflation equilibriums and regime switching...