Inflation, Money and the Role of Fiscal Arrangements: an Analytic Framework for the Inflation Problem

  • Karl Brunner


A persistent and world-wide inflation has attracted public attention. The space allotted in newspapers and the efforts invested in political rhetoric or the rapid succession of policy programmes reflects the general concern. The public discussion also produced a remarkable array of ideas and beliefs bearing on the inflation problem. This array can be usefully classified into three major groups according to the following two criteria: (i) the dependence or independence of price movements with respect to current and past evolutions of market conditions, and (ii) the occurrence or non-occurrence of a dominant impulse pattern driving the inflationary process.


Monetary Policy Fiscal Policy Money Demand Output Market Asset Market 
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  1. 1.
    K. Brunner and A. H. Meltzer, ‘Friedman’s Monetary Theory’, Journal of Political Economy (Sept-Oct 1972 ), p. 842.Google Scholar
  2. 8.
    On this subject, see K. Brunner, ‘A Diagrammatic Exposition of the Money Supply Process’, Schweitzerische Zeitschrift flit. Volkswirtschaft und Statistik (Dec 1973)Google Scholar
  3. and K. Brunner, The Money Supply Process in Open Economies with Interdependent Security Markets: The Case of Imperfect Substitutability, mimeographed (Apr 1974).Google Scholar
  4. 13.
    For a treatment along these lines, see H. I. Grossman and R. E. Lucas, ‘The Macroeconomic Effects of Productive Public Expenditures’, The Manchester School of Economic and Social Studies (June 1974).Google Scholar

Copyright information

© Banca Commerciale Italiana 1976

Authors and Affiliations

  • Karl Brunner

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