Inflation

2026

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This paper argues that fiscal theory provides a complete and simple explanation for inflation, consistent with current institutions, and offers a new framework for understanding monetary policy.

* Explores various theories of inflation, including popular, monetarist, old-Keynesian, new-Keynesian, and fiscal theory.
* Analyzes historical episodes of inflation and disinflation to distinguish between different theoretical models.
* Proposes that fiscal theory, combined with new-Keynesian models, offers a more robust explanation of inflation and monetary policy.

Tags: inflation, monetary policy, fiscal theory, interest rates, economics

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