Advanced Search
MyIDEAS: Login to save this article or follow this journal

Money, prices and fiscal lags: a note on the dynamics of inflation


Author Info

  • Julio H. G. Olivera
Registered author(s):


    The author examines the monetarist-structuralist debate regarding inflation in South America and argues that both positions are limited in their scope. Moreover, the prevailing tendency to rely on a hybrid of the two is not adequate to make up for this limitation. This is because both conceptions tend to underrate, if not to disregard entirely, the part of inertia in the process. While the most familiar source of inflationary inertia is the anticipation of new prices, the more dangerous is built-in inertia arising from objective circumstances. In this regard the author spotlights a specific element of inertia, derived from the fiscal system. Due to a variety of factors, government expenditure generally follows the rise of the price level more rapidly than does government income. Thus, a general price expansion is liable to originate a certain amount of “passive†fiscal deficit. The author explores this hypothesis through a model that is not intended to replace the monetary or structural interpretations or any mixture of the two, but rather seeks to shed light on some interesting and relevant features that have previously escaped scrutiny and may be of use in identifying certain relevant factors.

    Download Info

    If 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.
    File URL:
    Download Restriction: no

    Bibliographic Info

    Article provided by Banca Nazionale del Lavoro in its journal BNL Quarterly Review.

    Volume (Year): 20 (1967)
    Issue (Month): 82 ()
    Pages: 258-267

    as in new window
    Handle: RePEc:psl:bnlaqr:1967:34

    Contact details of provider:
    Web page:

    Order Information:

    Related research

    Keywords: inflation; South America; fiscal deficit;

    Find related papers by JEL classification:


    No references listed on IDEAS
    You can help add them by filling out this form.


    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as in new window

    Cited by:
    1. Vegh, Carlos, 1991. "Stopping High Inflation: An Analytical Overview," MPRA Paper 20175, University Library of Munich, Germany.
    2. Bomfim, Antulio N. & Shah, Anwar, 1991. "Macroeconomic management and the division of powers in Brazil : perspectives for the nineties," Policy Research Working Paper Series 567, The World Bank.
    3. Juan Antonio Morales & Jeffrey Sachs, 1988. "Bolivia's Economic Crisis," NBER Working Papers 2620, National Bureau of Economic Research, Inc.
    4. Roque Fernández, 1989. "Institucionalidad Económica y Estabilidad Política," Latin American Journal of Economics-formerly Cuadernos de Economía, Instituto de Economía. Pontificia Universidad Católica de Chile., vol. 26(78), pages 169-176.
    5. Matias Vernengo, 2005. "Money and Inflation: A Taxonomy," Working Paper Series, Department of Economics, University of Utah 2005_14, University of Utah, Department of Economics.


    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.


    Access and download statistics


    When requesting a correction, please mention this item's handle: RePEc:psl:bnlaqr:1967:34. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Carlo D'Ippoliti).

    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.