Campus Units

Economics

Document Type

Article

Publication Version

Published Version

Publication Date

11-2003

Journal or Book Title

Macroeconomic Dynamics

Volume

7

Issue

5

First Page or Article ID Number

647

Last Page

669

DOI

10.1017/S1365100503020182

Abstract

This paper clarifies and extends previous work on the equivalence between monetary regimes and fiscal regimes involving social security systems. We show that monetary regimes of the type we study are equivalent to two alternative types of social security regimes. This result has an important implication. Notably, governments can finance a real expenditure by increasing the inflation rate, or finance the expenditure by increasing the tax rate on social security benefits. Such equivalence should help us better understand the role that monetary policy plays in these economies.

Comments

This article is published as Bhattacharya, Joydeep, Joseph H. Haslag, and Steven Russell. "Monetary policy, fiscal policy, and the inflation tax: equivalence results." Macroeconomic Dynamics 7, no. 5 (2003): 647-669. doi:10.1017/S1365100503020182.

Rights

Works produced by employees of the U.S. Government as part of their official duties are not copyrighted within the U.S. The content of this document is not copyrighted.

Language

en

File Format

application/pdf

Share

COinS