, control of inflation and control over the growth of national wealth, and a third outcome of importance, a high level of …). The assignment problem considers whether fiscal policy should be used to control inflation, leaving monetary policy to …

consequences of cuts in public spending for the rate of inflation. Monetary financing is viewed as the residual financing mode … in public consumption spending will lower the inflation rate in the revenue-efficient region of the seigniorage Laffer … curve. When there are cuts in public sector capital formation, the inflation rate can rise even in the seigniorage …

increase the flexibility of labour markets, they are likely to improve the short-run inflation-unemployment trade … encourage a decline in unemployment in response to good news on inflation can be used to strike a political deal with political … nominal GDP and, surprisingly, an even greater deceleration of inflation, so that their growth rate of real GDP accelerated …

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. …