TY - BOOK ID - 84541607 TI - Inflation and Fiscal Deficits : The Irrelevance of Debt and Money Financing PY - 1992 SN - 1462358012 1455210161 128160240X 9786613783097 1455238309 PB - Washington, D.C. : International Monetary Fund, DB - UniCat KW - Inflation KW - Money and Monetary Policy KW - Public Finance KW - Simulation Methods KW - Price Level KW - Deflation KW - Money Supply KW - Credit KW - Money Multipliers KW - Central Banks and Their Policies KW - Fiscal Policy KW - Debt KW - Debt Management KW - Sovereign Debt KW - Monetary Policy, Central Banking, and the Supply of Money and Credit: General KW - Macroeconomics KW - Public finance & taxation KW - Monetary economics KW - Government debt management KW - Public debt KW - Government debt planning KW - Prices KW - Public financial management (PFM) KW - Money KW - Debts, Public KW - Mexico UR - https://www.unicat.be/uniCat?func=search&query=sysid:84541607 AB - The purpose of this paper is to present a model that circumvents the requirement of explicitly setting a period in which the fiscal budget is to be balanced, yet implies that increases in the growth of public debt are bound to increase inflation when there is no perceived commitment to reduce the fiscal deficit. The model is based on a modified version of the cash in advance constraint. The results of numerical simulations suggest that an increase in the growth of debt to finance current consumption leads to an equal increase in inflation. The timing of this increase varies with the size of the deficit and the pace of economic growth. It is shown that small increases in small deficits yield fairly significant increases in inflation. Three policy conclusions are offered. ER -