Government Debt, the Money Supply, and Inflation; Theory and Evidence for Seven Industrialized Economies
This paper analyzes the theoretical and empirical relation between the growth of government debt and monetary policy for seven industrialized countries: France, Germany, Italy, Japan, Switzerland, the U.K., and the U.S. After analyzing the data we find that: (i) rates of monetary growth frequently differ sharply from the rate of growth of nominal government debt, so that there is no evidence that a rapidly growing level of government debt encourages immediate monetization; (ii) the rate of inflation is approximately equal to the difference between the rate of growth of the money supply and real output in all countries over all subperiods, so there is no evidence that an increase in government debt is a significant independent cause of inflation; and, (iii) 1974 signals a turning point in postwar data trends, marked by a decline in the rate of growth of real output and a sharp rise in the rate of growth of nominal debt for all the countries.
To our knowledge, this item is not available for
download. To find whether it is available, there are three
1. Check below under "Related research" whether another version of this item is available online.
2. Check on the provider's web page whether it is in fact available.
3. Perform a search for a similarly titled item that would be available.
|Date of creation:|
|Contact details of provider:|| Postal: 3254 Steinberg Hall-Dietrich Hall, Philadelphia, PA 19104-6367|
Phone: (215) 898-7616
Fax: (215) 573-8084
Web page: http://finance.wharton.upenn.edu/~rlwctr/
More information through EDIRC
When requesting a correction, please mention this item's handle: RePEc:fth:pennfi:15-84. 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: (Thomas Krichel)
If references are entirely missing, you can add them using this form.