Inflation and public debt reversals in advanced economies

Ichiro Fukunaga, Takuji Komatsuzaki and Hideaki Matsuoka

Contemporary Economic Policy, 2022, vol. 40, issue 1, 124-137

Abstract: This paper quantitatively assesses the effects of inflation shocks on the public debt‐to‐GDP ratio in 19 advanced economies using simulation and estimation approaches. The simulations suggest that 1 percentage point shock to the inflation rate can reduce the debt‐to‐GDP ratio by about 0.7 percentage points on average across countries, while the estimated impulse responses are a little larger and more persistent. Additional assumptions taking into account financial repression do not necessarily make these effects substantially larger. These results imply that modestly higher inflation, even if accompanied by some financial repression, could reduce the public debt burden only marginally.

Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
https://doi.org/10.1111/coep.12537

Related works:
Working Paper: Inflation and Public Debt Reversals in Advanced Economies (2020)
Working Paper: Inflation and Public Debt Reversals in Advanced Economies (2019)
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:bla:coecpo:v:40:y:2022:i:1:p:124-137

Ordering information: This journal article can be ordered from
https://ordering.onl ... 5-7287&ref=1465-7287

Access Statistics for this article

Contemporary Economic Policy is currently edited by Brad R. Humphreys

More articles in Contemporary Economic Policy from Western Economic Association International Contact information at EDIRC.
Bibliographic data for series maintained by Wiley Content Delivery ().