LEADER 04928oam 22010934 450 001 9910788523103321 005 20230829002219.0 010 $a1-4623-2458-4 010 $a1-4527-3602-2 010 $a1-282-44690-8 010 $a1-4519-9724-8 010 $a9786613820907 035 $a(CKB)3360000000443129 035 $a(EBL)3014388 035 $a(SSID)ssj0000943027 035 $a(PQKBManifestationID)11580566 035 $a(PQKBTitleCode)TC0000943027 035 $a(PQKBWorkID)10974786 035 $a(PQKB)10761444 035 $a(OCoLC)712989260 035 $a(MiAaPQ)EBC3014388 035 $a(IMF)WPIEE2006121 035 $a(EXLCZ)993360000000443129 100 $a20020129d2006 uf 0 101 0 $aeng 135 $aur|n|---||||| 181 $ctxt 182 $cc 183 $acr 200 10$aPublic Debt, Money Supply, and Inflation : $eA Cross-Country Study and Its Application to Jamaica /$fGoohoon Kwon, Lavern McFarlane, Wayne Robinson 210 1$aWashington, D.C. :$cInternational Monetary Fund,$d2006. 215 $a1 online resource (39 p.) 225 1 $aIMF Working Papers 300 $a"May 2006". 311 $a1-4518-6381-0 320 $aIncludes bibliographical references. 327 $a""Contents""; ""I. INTRODUCTION""; ""II. CONCEPTUAL FRAMEWORK""; ""III. EMPIRICAL FINDINGS OF THE CROSS-COUNTRY STUDY""; ""IV. APPLICATION TO JAMAICA""; ""V. POLICY IMPLICATIONS""; ""VI. SUMMARY AND CONCLUSIONS""; ""A. DATA SOURCES AND DEFINITIONS AND COUNTRY GROUPING""; ""B. DEBT-INFLATION TRAP AND DEBT SUSTAINABILITY""; ""REFERENCES"" 330 3 $aThis paper provides comprehensive empirical evidence that supports the predictions of Sargent and Wallace's (1981) "unpleasant monetarist arithmetic" that an increase in public debt is typically inflationary in countries with large public debt. Drawing on an extensive panel dataset, we find that the relationship holds strongly in indebted developing countries, weakly in other developing countries, but generally not in developed economies. These results are robust to the inclusion of other variables, corrections for endogeneity biases, and relaxation of common-slope restrictions and are invariant over sub-sample periods. We estimate a VAR to trace out the transmission channel and find the impulse responses consistent with the predictions of a forward-looking model of inflation. Wealth effects of public debt could also affect inflation, as posited by the fiscal theory of the price level, but we do not find supportive evidence. The results suggest that the risk of a debt-inflation trap is significant in highly indebted countries, and pure money-based stabilization is unlikely to be effective over the medium term. Our findings stress the importance of institutional and structural factors in the link between fiscal policy and inflation. 410 0$aIMF Working Papers; Working Paper ;$vNo. 2006/121 606 $aDebts, Public$xEconometric models 606 $aMoney supply 606 $aInflation (Finance) 606 $aInflation$2imf 606 $aMoney and Monetary Policy$2imf 606 $aPublic Finance$2imf 606 $aDebt$2imf 606 $aDebt Management$2imf 606 $aSovereign Debt$2imf 606 $aPrice Level$2imf 606 $aDeflation$2imf 606 $aMonetary Policy, Central Banking, and the Supply of Money and Credit: General$2imf 606 $aFiscal Policy$2imf 606 $aMacroeconomics$2imf 606 $aPublic finance & taxation$2imf 606 $aMonetary economics$2imf 606 $aPublic debt$2imf 606 $aMonetary base$2imf 606 $aFiscal policy$2imf 606 $aGovernment debt management$2imf 606 $aDebts, Public$2imf 606 $aPrices$2imf 606 $aMoney supply$2imf 607 $aJamaica$2imf 615 0$aDebts, Public$xEconometric models. 615 0$aMoney supply. 615 0$aInflation (Finance) 615 7$aInflation 615 7$aMoney and Monetary Policy 615 7$aPublic Finance 615 7$aDebt 615 7$aDebt Management 615 7$aSovereign Debt 615 7$aPrice Level 615 7$aDeflation 615 7$aMonetary Policy, Central Banking, and the Supply of Money and Credit: General 615 7$aFiscal Policy 615 7$aMacroeconomics 615 7$aPublic finance & taxation 615 7$aMonetary economics 615 7$aPublic debt 615 7$aMonetary base 615 7$aFiscal policy 615 7$aGovernment debt management 615 7$aDebts, Public 615 7$aPrices 615 7$aMoney supply 700 $aKwon$b Goohoon$01462101 701 $aMcFarlane$b Lavern$01462102 701 $aRobinson$b Wayne$0466129 801 0$bDcWaIMF 906 $aBOOK 912 $a9910788523103321 996 $aPublic Debt, Money Supply, and Inflation$93670952 997 $aUNINA