Deficits, money and inflation

Presidential politics, budget deficits, and monetary policy in the United States; 1960?1976

“…9 Contrary to the recent studies by , Barro (1978b), and Niskanen (1978), which failed to find support for the popular hypothesis that government deficits have a strong influence on the rate of monetary expansion, we find that the high-employment government deficit measure carries both the highest t-statistic and the largest beta coefficient in equation (1). Our results are more in line with those of Hamburger and Zwick (1981), who find evidence of a change in the relationship during the 1960s, with deficits having a much greater influence on monetary growth in the 1960s and 1970s than in the 1950s. We suspect, therefore, that besides our use of the high-employment deficit measure, our concentration on the post-1960 period is also a major explanation of why we find strongly significant results while Barro and Niskanen did not.…”

“…4;Tufte, 1978: 8, 16-21); and Hamburger and Zwick, 1981). Therefore we have selected the interval from 1960 through the election year 1976 as most relevant for study, testing the extent to which monetary and fiscal policy behaved in a manner implied by a political business cycle hypothesis over a period in which it has been argued that it was operative.…”

Revisit the Budget Deficits and Inflation: Evidence from Time and Frequency Domain Analyses

“…The main purpose of this analysis can understand the determiners of the inflation. There are some studies for the US (Hamburger and Zwick [25]; Dwyer [26]; Darrat [27]; Ahking and Miller [28]) and the others are related to developed countries (King and Plosser [29]; Giannaros and Kolluri [30]; Protopapadakis and Siegel [31]; Barnhart and Darrat [32]). About these topics, there are lots of papers for some other countries (Ho [33]; Siddiqui [34]; Burdekin and Wohar [35]; De Haan and Zelhorst [36]; Choudhary and Parai [37]; Buiter and Patel [38]; Dogas [39]; Sowa [40]; Hondroyiannis and Papapetrou [41] Metin [42]; Metin [43]; Domac and Yucel [44]; Lin and Chu [45]; Jalil, Tariq and Bibi [6]).…”

“…Hamburger and Zwick [25] tested the relationships between monetary and fiscal policy in the US. They found that deficits had had important effect on the growth in the US money supply since 1961.…”

Budget deficits, money supply and price level in West Africa

“…Inflation occurs when money supply expands more rapidly than money demand. Budget deficits are inflationary only if it is monetized to increase the monetary base of the economy (Hamburger and Zwick, 1981). The Keynesian view argues that money is important but is not responsible for changes in price levels.…”