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Who prevails when fiscal and monetary authorities disagree about the value of public expenditure and how much to discount the future? When the fiscal authority sets debt as its main policy instrument it achieves fiscal dominance, rendering the preferences of the central bank, and thus its...
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, effective revenue ceilings induce an increase in deficit, debt and inflation. Under many scenarios, including recurrent adverse …
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Central banks are viewed as having a demonstrated ability to lower long-run inflation. Since the financial crisis … an explanation for why this may be the case. Because central banks have limited instruments, long-run inflation is … ultimately determined by fiscal policy. Central bank control of long-run inflation therefore ultimately hinges on its ability to …
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movements with little inflation response; yet, at some point, something snaps, and a sudden inflation takes off that is strongly …
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This paper analyses the link between discretionary fiscal policy and interest-growth differentials (r-g). Panel regressions based on a dataset for 20 advanced countries over the years 1990-2019 reveal no evidence of a systematic linear relationship between fiscal policy and r-g. However, more...
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