Sep 21, 2006

Articles in journals

Centeno, M., Novo, A.

93

6

This paper evaluates the existence of a relation between public deficits and inflation using quarterly data for Portugal. In theory, this link can be explained either through aggregate demand or via the monetization of the deficit. The results for the period 1978:2 1994:4 allow accepting the absence of effects of the government deficit upon the money supply or even upon the monetary base. It is, however, possible to validate the existence of a direct effect of the deficit on inflation.

Government deficit,Inflation,Money supply,Portugal