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Monetary policy arithmetic for a deflationary economy

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Please use this identifier to cite or link to this item:http://hdl.handle.net/2115/30147

Title: Monetary policy arithmetic for a deflationary economy
Authors: Kudoh, Noritaka Browse this author →KAKEN DB
Keywords: budget arithmetic
deflation
Issue Date: May-2005
Publisher: Elsevier B.V.
Journal Title: Economics Letters
Volume: 87
Issue: 2
Start Page: 161
End Page: 167
Publisher DOI: 10.1016/j.econlet.2004.10.011
Abstract: This paper characterizes general properties of an economy that experiences deflation by investigating the long-run government budget constraint. A sufficient condition for deflation in an economy under a balanced budget is that the nominal interest rate is below the output growth rate. With a primary deficit, deflation occurs in a liquidity trap if the government is heavily in debt. Simple budget arithmetic reveals that it is never possible to finance a negative currency seigniorage by rolling over the public debt.
Relation: http://www.sciencedirect.com/science/journal/01651765
Type: article (author version)
URI: http://hdl.handle.net/2115/30147
Appears in Collections:経済学院・経済学研究院 (Graduate School of Economics and Business / Faculty of Economics and Business) > 雑誌発表論文等 (Peer-reviewed Journal Articles, etc)

Submitter: 工藤 教孝

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