Debt, Cash Flow and Inflation Incentives: A Swedish Example / Mats Persson, Torsten Persson, Lars E. O. Svensson.

Format:

Book

Author/Creator:

Persson, Mats.

Contributor:

National Bureau of Economic Research.

Persson, Torsten.

Svensson, Lars E. O.

Series:

Working Paper Series (National Bureau of Economic Research) no. w5772.

NBER working paper series no. w5772

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Other Title:

Debt, Cash Flow and Inflation Incentives

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 1996.

Summary:

The fiscal gains from, and hence the political incentives to, an increase in inflation rate of ten percentage points may be substantial: with Swedish data from 1994, these gains would have been an annual real flow of 3-4 percent of GDP, or a capitalized value of nearly 100 percent of GDP. They would mainly have arisen from the nominalistic features of the tax and transfer systems rather than from the traditional sources: seignorage and real depreciation of the public debt. The welfare costs of such an inflation increase would have been even larger, however, and would thus have reduced net welfare. Possible institutional reforms, aimed at making the political costs of inflation more equal to the social costs, are presented and discussed

Notes:

Print version record

September 1996.