When are fiscal deficits inflationary in low-income countries?

Michael Bleaney, Atsuyoshi Morozumi () and Zakari Mumuni

No 2020-02, Discussion Papers from University of Nottingham, CREDIT

Abstract: Previous research has found that the relationship between fiscal deficits and inflation is conditional on income levels: deficits tend to be inflationary in developing countries but not in advanced economies. We show that within low-income countries (LICs) the relationship is again conditional: only when relatively poor institutions fail to hold governments accountable to the general public are fiscal deficits inflationary in LICs.

Keywords: Fiscal deficits; Inflation; Government accountability (search for similar items in EconPapers)
Date: 2020
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Persistent link: https://EconPapers.repec.org/RePEc:not:notcre:20/02

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