The author defines two parameters: the proportion (j) of interest payments on government bonds financed by taxes (as the fiscal paramet er) and the ratio (a) of money to bond finance of the deficit (as the monetary parameter). It is shown that while the effect of an increase in j is...

The authors used the policy game approach to gain insight into a problem that has puzzled analysts of high inflation economies. Why are programs based on tight fiscal and monetary policies slow at reducing inflation in high inflation countries? Distinguishing between regimes of rule and...