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Book Cover
Author Catão, Luis.

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]
Online access available from:
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Description 1 online resource (31 pages) : illustrations
monochrome rdacc
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. MiAaHDL
digitized 2010 HathiTrust Digital Library committed to preserve pda MiAaHDL
Print version record
Subject Budget deficits -- Developing countries -- Effect of inflation on -- Econometric models
Finance, Public -- Developing countries -- Econometric models.
Fiscal policy -- Developing countries -- Econometric models.
Inflation (Finance) -- Developing countries -- Econometric models.
Form Electronic book
ISBN 1281263761