Title Fiscal deficits and inflation : a new look at the emerging market evidence / Luis Catão and Marco Terrones

Published [Washington, D.C.] : International Monetary Fund, Research Dept., ©2001

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Description 1 online resource (31 pages) : illustrations Series IMF working paper ; WP/01/74 IMF working paper ; WP/01/74. Summary 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 1 1/2 to 6 percentage points, depending on the size of the inflation tax base Bibliography Includes bibliographical references (pages 29-31) Notes Master and use copy. Digital master created according to Benchmark for Faithful Digital Reproductions of Monographs and Serials, Version 1. Digital Library Federation, December 2002. http://purl.oclc.org/DLF/benchrepro0212 MiAaHDL digitized 2010 HathiTrust Digital Library committed to preserve pda MiAaHDL Print version record Subject Fiscal policy -- Developing countries -- Econometric models Finance, Public -- Developing countries -- Econometric models Inflation (Finance) -- Developing countries -- Econometric models Budget deficits -- Developing countries -- Effect of inflation on -- Econometric models Budget deficits -- Developing countries -- Econometric models Budget deficits -- Econometric models Finance, Public -- Econometric models Fiscal policy -- Econometric models Inflation (Finance) -- Econometric models Developing countries Form Electronic book Author Terrones, Marco International Monetary Fund. Research Department. ISBN 1451895992 9781451895995 1281263761 9781281263766

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