Hilscher, Jens; Raviv, Alon; Reis, Ricardo - C.E.P.R. Discussion Papers - 2014
-than-expected inflation can lower the real value of outstanding government debt. Looking forward, we derive a formula for the debt burden that …-adjusted probability distributions for inflation at different horizons. The estimates suggest that it is unlikely that inflation will lower … the US fiscal burden significantly, and that the effect of higher inflation is modest for plausible counterfactuals. If …