policy coerced into leaning against the wind loses full control over price inflation. The separation setup of M&Ms is thus …

arithmetic of Sargent and Wallace (1981) states that in a fiscally dominant regime tighter money now can cause higher inflation … normative content. I analyze conditions under which it is optimal in a welfare sense for the central bank to delay inflation by … aforementioned monetarist arithmetic holds, in the sense that if the government finds it optimal to delay inflation, it does so …

Sargent and Wallace (S-W) show that, even when inflation is prima facie a strictly monetary phenomenon -- prices are … flexible, markets clear and velocity is constant -- inflation is, in the long run, a fiscal phenomenon. This follows from the … published government deficit figures for the effect of inflation on the real value of the stock of nominal government debt (as …

Sargent and Wallace (S-W) show that, even when inflation is prima facie a strictly monetary phenomenon -- prices are … flexible, markets clear and velocity is constant -- inflation is, in the long run, a fiscal phenomenon. This follows from the … published government deficit figures for the effect of inflation on the real value of the stock of nominal government debt (as …