The Backing of Government Debt and the Price Level

Cahier 2003-22

CASTRO, Rui

RESENDE, Carlos

RUGE-MURCIA, Francisco J.

The Backing of Government Debt and the Price

Level

Département de sciences économiques

Université de Montréal

Faculté des arts et des sciences C.P. 6128, succursale Centre-Ville Montréal (Québec) H3C 3J7 Canada http://www.sceco.umontreal.ca SCECO-information@UMontreal.CA Téléphone : (514) 343-6539 Télécopieur : (514) 343-7221

Ce cahier a également été publié par le Centre interuniversitaire de recherche en économie quantitative (CIREQ) sous le numéro 16-2003.

This working paper was also published by the Center for Interuniversity Research in Quantitative Economics (CIREQ), under number 16-2003

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Résumé

Dans cet article, nous étudions la dépendance entre les politiques fiscales et monétaires et leur rôle conjoint dans la détermination du niveau des prix. Dans le cadre étudié, une politique fiscale de long terme permet à l'État de supporter une part G d'une importante dette publique par la valeur présente escomptée des excédents primaires courants et futurs. Le reste de la dette est supporté par seigneuriage. Le paramètre G illustre la dépendance entre les autorités monétaires et fiscales. Nous montrons que dans une économie monétaire standard, cette règle de politique implique que le niveau des prix ne dépend pas uniquement du stock de monnaie, mais aussi de la part de la dette supportée par la monnaie. Dans une application empirique, nous estimons les valeurs de G pour les pays de l'OCDE à partir de données sur la consommation nominale, la base monétaire et la dette publique. Selon nos résultats, la dette semble jouer un rôle mineur dans la détermination du niveau des prix de ces économies. De plus, les estimations de G sont en accord avec les mesures habituelles d'indépendance des banques centrales.

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0.9 0.95 1 1.05 1.1

Delta

Index by Alesina and Summers (1993)

Fig. 1: Relation between Delta

Central Bank Independence (I)

Ger U.S. Can U.K. Spa Bel Ita Swe Nor Fra

0.9 0.95 1 1.05 1.1

Delta

Index by Cukierman (1992)

Fig. 2: Relation between Delta and

Central Bank Independence (II)

U.S. Nor Spa Ita Bel Fra Swe Fin _U.K. Can Aut Ger

0.9 0.95 1 1.05 1.1

Delta

Seigniorage (% of GDP)

Fig. 3: Relation between Delta

and Seigniorage (I)

Ita Spa U.S. Fin U.K. Swe Aut Ger Nor Fra Bel Can

0.9 0.95 1 1.05 1.1

Delta

Seigniorage (% of Gov. Spending)

Fig. 4: Relation between Delta

and Seigniorage (II)

Spa Ita U.S. U.K. Fin Bel Nor Fra Ger Can Swe Aut