This paper examines inflationary finance in an open growing economy where the existence of an informal sector distorts ordinary taxation, and where either public services or capital in the public sector is used as an input to private production. Public input is assumed to be rival and...

This paper examines endogenously-growing economies which produce separate goods on the world market, and which can use seigniorage as a means of public finance in order to subsidize the accumulation of human capital.

It is indeed inflation targeting which has over recent years become popular in many central banks. The author's task will, however, be somewhat more limited in that she will try to evaluate the switch of monetary policies from the target zone approach to an explicit inflation target in her own...