TY  - JOUR
AU  - Persson,Mats
AU  - Persson,Torsten
AU  - Svensson,Lars E. O.
TI  - Debt, Cash Flow and Inflation Incentives: A Swedish Example
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 5772
PY  - 1996
Y2  - September 1996
UR  - http://www.nber.org/papers/w5772
L1  - http://www.nber.org/papers/w5772.pdf
N1  - Author contact info:
Torsten Persson
Torsten and Ragnar Soderberg Chair in Economic Sci
Institute for International Economic Studies
Stockholm University
SE-106 91 Stockholm
SWEDEN
Tel: +46 8 163066
Fax: +46 8 6747801
E-Mail: Torsten.Persson@iies.su.se

Lars E.O. Svensson
Sveriges Riksbank
SE-103 37 Stockholm
SWEDEN
Tel: +46 8 787 0107
Fax: +46 8 21 0531
E-Mail: lars.svensson@iies.su.se
AB  - 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
ER  -