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.:
- Tanner, J Ernest, 1970. "Empirical Evidence on the Short-Run Real Balance Effect in Canada," Journal of Money, Credit and Banking, Blackwell Publishing, Blackwell Publishing, vol. 2(4), pages 473-85, November.
- Brunner, Karl & Meltzer, Allan H, 1972. "Money, Debt, and Economic Activity," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 80(5), pages 951-77, Sept.-Oct.
- Smith, Warren L, 1970. "On Some Current Issues in Monetary Economics: An Interpretation," Journal of Economic Literature, American Economic Association, American Economic Association, vol. 8(3), pages 767-82, September.
- Kochin, Levis A, 1974. "Are Future Taxes Anticipated by Consumers? Comment," Journal of Money, Credit and Banking, Blackwell Publishing, Blackwell Publishing, vol. 6(3), pages 385-94, August.
- Seater, John J, 1982. "Are Future Taxes Discounted?," Journal of Money, Credit and Banking, Blackwell Publishing, Blackwell Publishing, vol. 14(3), pages 376-89, August.
- Barro, Robert J., 1974.
"Are Government Bonds Net Wealth?,"
3451399, Harvard University Department of Economics.
- Barro, Robert J, 1974. "Are Government Bonds Net Wealth?," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 82(6), pages 1095-1117, Nov.-Dec..
- 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,
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, University of Connecticut, Department of Economics 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 references are entirely missing, you can add them using this form.