Perceptions and Misperceptions of Fiscal Inflation

@inproceedings{Leeper2011PerceptionsAM,
  title={Perceptions and Misperceptions of Fiscal Inflation},
  author={Eric M. Leeper and Todd B. Walker},
  year={2011}
}
The Great Recession and worldwide financial crisis have exploded fiscal imbalances and brought fiscal policy and inflation to the forefront of policy concerns. Those concerns will only grow as aging populations increase demands on government expenditures in coming decades. It is widely perceived that fiscal policy is inflationary if and only if it leads the central bank to print new currency to monetize deficits. Monetization can be inflationary. But it is a misperception that this is the only… CONTINUE READING

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