Is Inflation Fiscally Determined?
Lamia Bazzaoui () and
Jun Nagayasu ()
Additional contact information
Lamia Bazzaoui: Graduate School of Economics and Management, Tohoku University, Sendai 980-8576, Japan
Sustainability, 2021, vol. 13, issue 20, 1-26
This paper examines the relationship between fiscal policy and inflation for 44 countries, from 1960 to 2020. The study was conducted using a panel VAR approach while accounting for the difference in monetary policy frameworks and the levels of fiscal space across countries. Results suggest that budget deficits are less likely to cause inflation when monetary policy is based on inflation targeting. In contrast, they are inflationary in the group of countries with a poorly structured monetary policy (such as partially dollarized Latin American economies).
Keywords: inflation; fiscal policy; monetary policy; public debt; panel VAR GMM (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed
Downloads: (external link)
Working Paper: Is Inflation Fiscally Determined? (2019)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:gam:jsusta:v:13:y:2021:i:20:p:11306-:d:655296
Access Statistics for this article
Sustainability is currently edited by Mr. Samuel Li
More articles in Sustainability from MDPI
Bibliographic data for series maintained by MDPI Indexing Manager ().