Franklin

Virtual Deficits and the Patinkin Effect [electronic resource] Cardoso, Eliane A..

Author/Creator:
Cardoso, Eliane A.
Publication:
Washington, D.C. : International Monetary Fund, 1998.
Series:
IMF eLibrary
IMF Working Papers; Working Paper No. 98/41.
IMF Working Papers; Working Paper No. 98/41
Format/Description:
Government document
Book
1 online resource (40 p.)
Local subjects:
Aggregate demand.
Annual inflation.
Annual inflation rate.
Average inflation.
Average inflation rate.
Central bank.
Demand for money.
Effect of inflation.
Extreme inflation.
High inflation.
High inflation rate.
Increase in inflation.
Inflation.
Inflation rate.
Inflation rates.
Inflation stabilizations.
Inflation tax.
Low inflation.
Lower inflation.
Maximum inflation.
Monetary base.
Monetary dynamics.
Monetary fund.
Monetary growth.
Monetary policy.
Monetary reform.
Money balances.
Money growth.
Money supply.
National bank.
Nominal interest rate.
Price level.
Printing money.
Quantity theory.
Quantity theory of money.
Rate of inflation.
Real interest rate.
Real interest rates.
Real value.
Real wages.
Reduction in inflation.
Reserve requirement.
Reserve requirements.
Rise in inflation.
Rising inflation.
Steady-state inflation.
Theory of money.
Tight monetary policy.
Brazil.
Summary:
The paper develops a model of inflationary finance that defines the fiscal deficit as a function of the virtual deficit—a deficit that would be observed if inflation were zero. It studies the negative relationship between the inflation rate and real government expenditures—the Patinkin effect. The model outperforms others in explaining four-digit inflation rates that never explode into hyperinflation. It also explains how apparently expansionist fiscal policies end in real deficits that are small and compatible with the small amount of seigniorage that can be collected at high inflation rates. Finally, it applies the model to the case of Brazil.
Notes:
Description based on print version record.
Contributor:
Cardoso, Eliane A.
Other format:
Print Version:
ISBN:
145184607X:
9781451846072
ISSN:
1018-5941
Publisher Number:
10.5089/9781451846072.001
Access Restriction:
Restricted for use by site license.
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