Inflation is not an Effective Remedy for High Public Debt Ratio
Abstract Economies around the world are facing high price increases. Inflation affects government budgets as well as the sustainability of public debt. How and to what extent is the public debt ratio affected by higher inflation rates? High inflation is not a lasting remedy for a high public debt ra...
Saved in:
| Main Authors: | , |
|---|---|
| Format: | Article |
| Language: | deu |
| Published: |
Sciendo
2022-11-01
|
| Series: | Wirtschaftsdienst |
| Online Access: | https://doi.org/10.1007/s10273-022-3311-4 |
| Tags: |
Add Tag
No Tags, Be the first to tag this record!
|
| _version_ | 1832572745290874880 |
|---|---|
| author | Michael Grömling Jürgen Matthes |
| author_facet | Michael Grömling Jürgen Matthes |
| author_sort | Michael Grömling |
| collection | DOAJ |
| description | Abstract Economies around the world are facing high price increases. Inflation affects government budgets as well as the sustainability of public debt. How and to what extent is the public debt ratio affected by higher inflation rates? High inflation is not a lasting remedy for a high public debt ratio. Only under very specific conditions — and by simultaneously ignoring the manifold knock-on effects of inflation — does a higher inflation rate bring about a decline in the government debt ratio. In the longer term, it may be dangerous if inflation expectations are de-anchored and interest rates rise for a prolonged time so that debt sustainability is ultimately jeopardised. |
| format | Article |
| id | doaj-art-5b7be7b727304fe4b693e5df19a0d297 |
| institution | Kabale University |
| issn | 1613-978X |
| language | deu |
| publishDate | 2022-11-01 |
| publisher | Sciendo |
| record_format | Article |
| series | Wirtschaftsdienst |
| spelling | doaj-art-5b7be7b727304fe4b693e5df19a0d2972025-02-02T07:52:04ZdeuSciendoWirtschaftsdienst1613-978X2022-11-011021188188410.1007/s10273-022-3311-4Inflation is not an Effective Remedy for High Public Debt RatioMichael Grömling0Jürgen Matthes1Strukturwandel, Verteilung, Lohnfindung, Institut der deutschen Wirtschaft Köln e.V.Kompetenzfeldes Internationale Wirtschaftsordnung und Konjunktur, Institut der deutschen Wirtschaft Köln e.V.Abstract Economies around the world are facing high price increases. Inflation affects government budgets as well as the sustainability of public debt. How and to what extent is the public debt ratio affected by higher inflation rates? High inflation is not a lasting remedy for a high public debt ratio. Only under very specific conditions — and by simultaneously ignoring the manifold knock-on effects of inflation — does a higher inflation rate bring about a decline in the government debt ratio. In the longer term, it may be dangerous if inflation expectations are de-anchored and interest rates rise for a prolonged time so that debt sustainability is ultimately jeopardised.https://doi.org/10.1007/s10273-022-3311-4 |
| spellingShingle | Michael Grömling Jürgen Matthes Inflation is not an Effective Remedy for High Public Debt Ratio Wirtschaftsdienst |
| title | Inflation is not an Effective Remedy for High Public Debt Ratio |
| title_full | Inflation is not an Effective Remedy for High Public Debt Ratio |
| title_fullStr | Inflation is not an Effective Remedy for High Public Debt Ratio |
| title_full_unstemmed | Inflation is not an Effective Remedy for High Public Debt Ratio |
| title_short | Inflation is not an Effective Remedy for High Public Debt Ratio |
| title_sort | inflation is not an effective remedy for high public debt ratio |
| url | https://doi.org/10.1007/s10273-022-3311-4 |
| work_keys_str_mv | AT michaelgromling inflationisnotaneffectiveremedyforhighpublicdebtratio AT jurgenmatthes inflationisnotaneffectiveremedyforhighpublicdebtratio |