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 in the mean and variance of the fiscal deficit probability density …

markets now expect is not enough to reduce inflation to targets, experience from previous global recessions suggests that the …