TY - BOOK ID - 84783247 TI - Deflation and Public Finances : Evidence from the Historical Records AU - End, Nicolas. AU - Duplay, Renaud. AU - Tapsoba, Sampawende. AU - Terrier, G. PY - 2015 SN - 1513566814 1513511092 1513539698 PB - Washington, D.C. : International Monetary Fund, DB - UniCat KW - Fiscal policy KW - Deflation (Finance) KW - Disinflation KW - Finance KW - Tax policy KW - Taxation KW - Economic policy KW - Finance, Public KW - Econometric models. KW - Government policy KW - Inflation KW - Macroeconomics KW - Public Finance KW - Price Level KW - Deflation KW - Fiscal Policy KW - General Financial Markets: General (includes Measurement and Data) KW - Wages, Compensation, and Labor Costs: Other KW - Economic History: Macroeconomics and Monetary Economics KW - Growth and Fluctuations: General, International, or Comparative KW - Debt KW - Debt Management KW - Sovereign Debt KW - Business Fluctuations KW - Cycles KW - Public finance & taxation KW - Economic growth KW - Fiscal stance KW - Public debt KW - Economic recession KW - Prices KW - Debts, Public KW - Recessions KW - United States UR - https://www.unicat.be/uniCat?func=search&query=sysid:84783247 AB - This paper examines the impact of deflation on fiscal aggregates. With deflation relatively rare in modern history, it relies mostly on the historical records, using a dataset panel covering 150 years and 21 advanced economies. Empirical evidence shows that deflation affects public finances mostly through increases in public debt ratios, reflecting a worsening in interest rate–growth differentials. On average, a mild rate of deflation increases public debt ratios by almost 2 percent of GDP a year, this impact being larger during recessionary deflations. Using a simulation model that accounts for composition effects and price expectations, we also find that, for European countries, a 2 percentage point deflationary shock in both 2015 and 2016 would lead to a deterioration in the primary balance of as much as 1 percent of GDP by 2019. ER -