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The inflation adjusted nominal deficit: a note on Robert Barros’s definition

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  • Viviane Luporini

Abstract

This note discusses the concept of 'inflation adjusted nominal deficit' proposed by Robert Barro in light of a stock-flow consistent real deficit. It is argued that the calculation proposed by the author violates the principle of stock-flow consistency and leads one to the erroneous interpretation that a rise in the rate of inflation decreases the government deficit in nominal terms.

Suggested Citation

  • Viviane Luporini, 2000. "The inflation adjusted nominal deficit: a note on Robert Barros’s definition," Textos para Discussão Cedeplar-UFMG td138, Cedeplar, Universidade Federal de Minas Gerais.
    • Handle: RePEc:cdp:texdis:td138
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    File URL: https://www.cedeplar.ufmg.br/pesquisas/td/TD%20138.pdf
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    References listed on IDEAS

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    1. Hamilton, James D & Flavin, Marjorie A, 1986. "On the Limitations of Government Borrowing: A Framework for EmpiricalTesting," American Economic Review, American Economic Association, vol. 76(4), pages 808-819, September.
    2. Bohn, Henning, 1992. "Budget deficits and government accounting," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 37(1), pages 1-83, December.
    3. Siegel, Jeremy J, 1979. "Inflation-Induced Distortions in Government and Private Saving Statistics," The Review of Economics and Statistics, MIT Press, vol. 61(1), pages 83-90, February.
    4. Eisner, Robert & Pieper, Paul J, 1986. "A New View of the Federal Debt and Budget Deficits: Reply," American Economic Review, American Economic Association, vol. 76(5), pages 1156-1157, December.
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