Inflation Expectations, Wealth Perception, and Consumption Expenditure
AbstractThe literature on wealth perception has been focused on the tax discounting of government bonds and, to a lesser extent, the Pesek-Saving effect. The authors consider here, in addition, the effects of expected inflation on wealth perception. In the resulting broadened framework, they find empirically that there is overwhelming expected-inflation discounting of money, but little or no tax discounting of bonds. This has far-reaching policy implications that are contrary to conventional wisdom. Based on an examination of equilibrium consumption, bond-financed budget deficits are, surprisingly, found to be more stimulative than money-financed deficits. More importantly, open-market operations not only turn out to be the least potent, but can in fact produce perverse effects.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by Eastern Economic Association in its journal Eastern Economic Journal.
Volume (Year): 14 (1988)
Issue (Month): 1 (Jan-Mar)
Contact details of provider:
Postal: c/o Dr. Alexandre Olbrecht, The Anisfield School of Business 205, Ramapo College, 505 Ramapo Valley Road, Ramapo, New Jersey 07430, USA
Phone: (201) 684-7346
Web page: http://www.ramapo.edu/eea/journal.html
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Kochin, Levis A, 1974. "Are Future Taxes Anticipated by Consumers? Comment," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 6(3), pages 385-94, August.
- Brunner, Karl & Meltzer, Allan H, 1972. "Money, Debt, and Economic Activity," Journal of Political Economy, University of Chicago Press, vol. 80(5), pages 951-77, Sept.-Oct.
- Barro, Robert J., 1974.
"Are Government Bonds Net Wealth?,"
3451399, Harvard University Department of Economics.
- Tanner, J Ernest, 1970. "Empirical Evidence on the Short-Run Real Balance Effect in Canada," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 2(4), pages 473-85, November.
- Seater, John J, 1982. "Are Future Taxes Discounted?," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 14(3), pages 376-89, August.
- Smith, Warren L, 1970. "On Some Current Issues in Monetary Economics: An Interpretation," Journal of Economic Literature, American Economic Association, vol. 8(3), pages 767-82, September.
- Alpha C. Chiang & Stephen M. Miller, 1998.
"The Perception of Government Bonds and Money as Net Wealth: An Integrated Approach,"
Eastern Economic Journal,
Eastern Economic Association, vol. 24(4), pages 435-448, Fall.
- Alpha C. Chiang & Stephen M. Miller, 1998. "The Perception of Government Bonds and Money as Net Wealth: An Integrated Approach," Working papers 1998-05, University of Connecticut, Department of Economics.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Victor Matheson, College of the Holy Cross).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.