Jump to ContentJump to Main Navigation
Crisis, Stabilization, and Economic ReformTherapy by Consensus$
Users without a subscription are not able to see the full content.

Michael Bruno

Print publication date: 1993

Print ISBN-13: 9780198286639

Published to Oxford Scholarship Online: September 2006

DOI: 10.1093/0198286635.001.0001

Show Summary Details
Page of

PRINTED FROM OXFORD SCHOLARSHIP ONLINE (www.oxfordscholarship.com). (c) Copyright Oxford University Press, 2020. All Rights Reserved. An individual user may print out a PDF of a single chapter of a monograph in OSO for personal use. date: 28 January 2020

Shocks and Accommodation: The Dichotomy and Mechanics of High Inflation

Shocks and Accommodation: The Dichotomy and Mechanics of High Inflation

(p.42) 3 Shocks and Accommodation: The Dichotomy and Mechanics of High Inflation
Crisis, Stabilization, and Economic Reform

Michael Bruno

Oxford University Press

This chapter examines the dynamics of high inflation under accommodation to price shocks. One simple approach to the budget as a source of the inflationary process is to consider the link of the form of finance, namely seigniorage revenue and the average rate of inflation, on the hypothetical assumption that one is observing fluctuations around steady states. This gives at least some lead on the possible long-run relationship between the monetization of deficits and the rate of inflation. A closer historical look at the changing trade-off between inflation, real GDP growth, and the current account leads to the detailed dynamics of the inflationary process without which the ‘shocks and accommodation’ nature of the process cannot be understood. Part of the reason for the progressive acceleration of inflation will be found in the connection between the budget deficit and the balance-of-payments deficit, and the government response in the form of devaluations and subsidy cuts.

Keywords:   price shock, seigniorage revenue, budget, finance, deficit, Israel

Oxford Scholarship Online requires a subscription or purchase to access the full text of books within the service. Public users can however freely search the site and view the abstracts and keywords for each book and chapter.

Please, subscribe or login to access full text content.

If you think you should have access to this title, please contact your librarian.

To troubleshoot, please check our FAQs , and if you can't find the answer there, please contact us .