Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/71908 
Year of Publication: 
2013
Series/Report no.: 
Bundesbank Discussion Paper No. 12/2013
Publisher: 
Deutsche Bundesbank, Frankfurt a. M.
Abstract: 
We estimate the low-frequency relationship between fiscal deficits and inflation and pay special attention to its potential time variation by estimating a time-varying VAR model for U.S. data from 1900 to 2011. We find the strongest relationship neither in times of crisis nor in times of high public deficits, but from the mid-1960s up to 1980. Our results suggest that the low-frequency relationship between fiscal deficits and inflation is strongly related to the conduct of monetary policy and its interaction with fiscal policy after World War II.
Subjects: 
Time-Varying VAR
Inflation
Public Deficits
JEL: 
E42
E58
E61
ISBN: 
978-3-86558-906-4
Document Type: 
Working Paper

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