The fiscal gains from, and hence the political incentives for, an increase in the inflation rate of ten percentage … inflation increase would have been even larger, however, and would thus have reduced net welfare. Possible institutional reforms …, aimed at making the political costs of inflation more equal to the social costs, are presented and discussed. …

From 1970 to 1985, Israel experienced high inflation. It rose in three jumps to new plateaus and eventually exceeded … of fallen bank shares caused the last big jump in inflation that occurred in October 1983. Bank shares had just collapsed …. Because that was foreseen, inflation immediately rose as predicted by the unpleasant monetarist arithmetic of Sargent and …

The thesis of this paper is that political differences between parties are a major explanation of inflation and … between which party was in power and the level and variability of inflation in the same period for these two countries. Fourth …, the theory provides a rationale for the commonly observed relationship between inflation and its variability. …

narrowed ahead of inflation divergence. Cross-country real interest rankings would then assume a negative correlation with the … corresponding inflation rankings. The paper argues that on theoretical grounds, a perverse correlation between real interest rates … and inflation can be predicted for `old EMS' conditions. Empirical evidence supports this prediction while failing to …