| Description |
1 online resource (28 pages) : color illustrations |
| Series |
IMF working paper ; WP/14/96 |
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IMF working paper ; WP/14/96.
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| Contents |
Cover -- Contents -- I. Introduction -- II. Brief Literature Review -- III. Simulating Seigniorage From Higher Inflation -- A. Methodology -- B. Results -- IV. Erosion of Real Value of Debt -- A. Methodology -- B. Baseline Results�Full Fisher Effect -- C. Simulations of Partial Fisher Effect -- V. Robustness of Assumptions -- VI. Concluding Remarks and Policy Implications -- Tables -- 1. Seignorage Gains from Inflation -- 2. Zero Inflation Simulation Results -- 3. Baseline Simulation Results -- 4. 30 Percent of GDP Debt Reduction Scenarios |
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5. Debt-Reducing Impacts of Inflation with Reduced Fisher Effect (Alpha=0.5)6. Debt-Reducing Impacts of Inflation with Reduced Fisher Effect (Alpha=0) -- 7. Robustness Regressions (Average Maturity) -- 7. Robustness Regressions (Average Maturity) -- 8. Robustness Regressions (Short- Term Share) -- Figures -- 1. Gross Public Debt in Advanced and G7 Economies, 1980�2017 -- 2. Percentage Breakdown of Central Government Debt, 2010 -- 3. Debt Reduction as a Function of Medium- and Long- Term Debt Share -- 4. Debt Reduction Outcomes with Varying Short-Term Debt Shares |
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5. How Varying Fisher Effects Impact Debt Reduction for G7 Average6. Inflation Scatter Plots, All OECD Countries -- 7. Inflation Scatter Plots, Selected OECD Countries -- 8. Average Maturity, Inflation, and Public Debt in G7 Economies -- References |
| Summary |
"This paper investigates the impact of low or high inflation on the public debt-to-GDP ratio in the G-7 countries. Our simulations suggest that if inflation were to fall to zero for five years, the average net debt-to-GDP ratio would increase by about 5 percentage points over the next five years. In contrast, raising inflation to 6 percent for the next five years would reduce the average net debt-to-GDP ratio by about 11 percentage points under the full Fisher effect and about 14 percentage points under the partial Fisher effect. Thus higher inflation could help reduce the public debt-to-GDP ratio somewhat in advanced economies. However, it could hardly solve the debt problem on its own and would raise significant challenges and risks. First of all, it may be difficult to create higher inflation, as evidenced by Japan's experience in the last few decades. In addition, un-anchoring of inflation expectations could increase long-term real interest rates, distort resource allocation, reduce economic growth, and hurt the lower-income households"--Abstract |
| Notes |
"Fiscal Affairs Department"--Page 2 of pdf |
|
"June 2014"--Page 2 of pdf |
| Bibliography |
Includes bibliographical references |
| Notes |
Online resource; title from pdf title page (IMF.org Web site, viewed June 17, 2014) |
| Subject |
Inflation (Finance)
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Debts, Public.
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Gross domestic product.
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Fisher effect (Economics)
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Inflation, Economic
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Debts, Public
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Fisher effect (Economics)
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Gross domestic product
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Inflation (Finance)
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| SUBJECT |
Group of Seven countries. http://id.loc.gov/authorities/subjects/sh96003045
|
| Subject |
Group of Seven countries
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| Form |
Electronic book
|
| Author |
Komatsuzaki, Takuji, author.
|
|
Binder, Ariel, author.
|
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International Monetary Fund. Fiscal Affairs Department, issuing body.
|
| ISBN |
9781498388245 |
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1498388248 |
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