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Please use this identifier to cite or link to this item: https://dspace.lboro.ac.uk/2134/2973

Title: Volatile public spending in a model of money and sustainable growth
Authors: Varvarigos, Dimitrios
Keywords: growth
inflation
volatility
seignorage
Issue Date: 2007
Abstract: In a model where seignorage provides the financing instrument for the government’s budget, public spending volatility has an adverse effect on long-run growth. This negative relationship arises because the incidence of volatility in this type of public policy is responsible for higher average money growth, thus induces individuals to devote less time/effort towards capital accumulation. Another implication of the model is that policy variability provides a possible argument behind the positive correlation between inflation and inflation variability.
Description: This is a working paper. It was also published at: http://ideas.repec.org/p/lbo/lbowps/2007_18.html.
URI: https://dspace.lboro.ac.uk/2134/2973
ISSN: 1750-4171
Appears in Collections:Working Papers (Economics)

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