Government Debt, the Central Bank and Inflation: Testing of Three Hypotheses and The Structure of Causality

Date

1993

Author

Abaan, Ernur Demir

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In this study three hypotheses are tested related with monetization of government debt. Given high inflationary environment in Turkey, these hypotheses are supported by evidence. It is argued that the government will not be able to affect the path of inflation unless its fiscal policy changes. Changing fiscal policy in this context implies changing taxes and subsidies. It is concluded that enme monetary variables are Granprr cause to the nath of inflation. Therefore, fiscal restraint is needed to reduce the pressure on the Central Bank's liabilities.

URI

https://hdl.handle.net/11511/112297

Collections

Department of Economics, Article