NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Debt, Cash Flow and Inflation Incentives: A Swedish Example

Mats Persson, Torsten Persson, Lars E. O. Svensson

NBER Working Paper No. 5772
Issued in September 1996
NBER Program(s):   IFM   ME   PE

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

download in pdf format
   (1780 K)

email paper

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w5772

Published: The Debt Burden and it's Consequences for Monetary Policy, King, M. and G. Calvo, eds., London: MacMillan, 1998, pp. 28-62.

Users who downloaded this paper also downloaded* these:
Chor and Freeman w11598 The 2004 Global Labor Survey: Workplace Institutions and Practices Around the World
Lichtenberg w9139 The Effect of Changes in Drug Utilization on Labor Supply and Per Capita Output
Cooper, Haltiwanger, and power w5260 Machine Replacement and the Business Cycle: Lumps and Bumps
Barrow, Markman, and Rouse w14240 Technology's Edge: The Educational Benefits of Computer-Aided Instruction
Conesa, Kitao, and Krueger w12880 Taxing Capital? Not a Bad Idea After All!
 
Publications
Activities
Meetings
NBER Videos
Themes
Data
People
About

National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us