TY - BOOK ID - 84540523 TI - Fiscal Deficits and Inflation : A New Look at the Emerging Market Evidence AU - Terrones, Marco. AU - Catão, Luis. PY - 2001 SN - 1462389333 1452705860 1281263761 1451895992 9786613778123 PB - Washington, D.C. : International Monetary Fund, DB - UniCat KW - Exports and Imports KW - Foreign Exchange KW - Inflation KW - Macroeconomics KW - Public Finance KW - Price Level KW - Deflation KW - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook: General KW - Debt KW - Debt Management KW - Sovereign Debt KW - Energy: Demand and Supply KW - Prices KW - International Lending and Debt Problems KW - Public finance & taxation KW - Currency KW - Foreign exchange KW - International economics KW - Government debt management KW - Oil prices KW - Exchange rate arrangements KW - Interest payments KW - Public financial management (PFM) KW - External debt KW - Debts, Public KW - Debt service KW - United States UR - https://www.unicat.be/uniCat?func=search&query=sysid:84540523 AB - Empirical studies have had little success in finding a statistically significant relationship between fiscal deficits and inflation in broad cross-country panels. This paper provides new econometric estimates for a panel of 23 emerging market countries during 1970-2000. Unlike previous studies, we allow for a rich dynamic specification and focus on the long-run relationship between the two variables controlling for differences in the inflation tax base. We find that a 1 percentage point reduction in the ratio of fiscal deficit to GDP typically lowers long-run inflation by 1½ to 6 percentage points, depending on the size of the inflation tax base. ER -