Understanding Policy in the Great Recession: Some Unpleasant Fiscal Arithmetic

John Cochrane

No 16087, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: I use the valuation equation of government debt to understand fiscal and monetary policy in and following the great recession of 2008-2009, to think about fiscal pressures on US inflation, and what sequence of events might surround such an inflation. I emphasize that a fiscal inflation can come well before large deficits or monetization are realized, and is likely to come with stagnation rather than a boom.

JEL-codes: E3 E31 E4 E5 E52 E6 (search for similar items in EconPapers)
Date: 2010-06
New Economics Papers: this item is included in nep-cba, nep-mac and nep-mon
Note: AP EFG
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Citations: View citations in EconPapers (22)

Published as Cochrane, John H., 2011. "Understanding policy in the great recession: Some unpleasant fiscal arithmetic," European Economic Review, Elsevier, vol. 55(1), pages 2-30, January.

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