Budget Displacement Effects of Inflationary Finance

摘要: When inflation is caused by an increase in the rate of issuance real money balances, less recourse to other sources government revenue necessary. This policy will therefore influence equilibrium growth path through both induced additional capital losses that individuals bear on their balances and necessary changes fiscal required balance budget. Though first these effects has received wide treatment literature, second been largely neglected. We analyze this issue a variety simple monetary models, using alternative specifications budget relation individual savings functions. The central conclusion all models tendency for intensity absence any portfolio proportions or interest rates. also present some numerical results parameters related current U.S. situation. Typically, 1 percent permanent produce stock 2-4 larger. following symbols be used: