The Impact of Fiscal Policy on Prices: Does the Fiscal Theory of Price Level Matter in Latvia?

Olegs Tkacevs

Baltic Journal of Economics, 2006, vol. 6, issue 1, 23-36

Abstract: The paper studies the indirect impact of fiscal policy on prices. Exploring VAR in two variables, primary balance ratio to GDP and public debt ratio to GDP, and calculating the impulse response functions to innovations in the former variable, it supposes an evidence of the exogeneity of Latvian general government budget balance. Borrowing from the recently developed Fiscal Theory of Price Level (FTPL) it implies that deterioration of the budget balance may lead to an upward price adjustment needed to assure fiscal solvency.

Keywords: Fiscal policy; budget balance (search for similar items in EconPapers)
JEL-codes: E31 E62 (search for similar items in EconPapers)
Date: 2006
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
https://biceps.org/wp-content/uploads/2023/03/spring_summer_2006.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bic:journl:v:6:y:2006:i:1:p:23-36

Access Statistics for this article

More articles in Baltic Journal of Economics from Baltic International Centre for Economic Policy Studies Contact information at EDIRC.
Bibliographic data for series maintained by Anna Zasova ().