Economics, Econometrics and Finance
8 years ago

Inflation in Europe has no clear impact on budget balance.

RePEc: Research Papers in Economics
The relationship between public balance and inflation in Europe
Patrícia Miklós-Somogyi, László Balogh

Paper Summary

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The relationship between budget balance and inflation in Europe between 1999 and 2007 was studied. The analysis found that there is no clear link between the two factors. Inflation can affect both the money coming in and going out of the budget, which can cancel each other out, keeping the budget balance stable.