South Africa's inflation: Monetary or fiscal

Guangling Liu and Christopher D. Solomon

No wp-2025-52, WIDER Working Paper Series from World Institute for Development Economic Research (UNU-WIDER)

Abstract: Conventional macroeconomics has viewed inflation as a monetary phenomenon through the Quantity Theory of Money. Ever-increasing sovereign debt globally has caused concern among economists. These concerns follow not from the ability of governments to repay their debt, but rather from the impact of sizeable debt portfolios on price levels. The Fiscal Theory of the Price Level epitomizes these concerns, contrasting the traditional view on inflation by arguing that it is a fiscal phenomenon caused by debt issuance without real backing.

Keywords: Monetary and fiscal policy; Inflation; Sovereign debt; Macroeconomics (search for similar items in EconPapers)
Date: 2025
New Economics Papers: this item is included in nep-cba and nep-mon
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