Effects of Inflation on Public Revenue and Expenditure
Some recent publications and official documents referring to the repercussions of inflation on public households create the impression of some sort of roulette gambling, rather than describing an interplay of economic actions and reactions with a more or less predictable outcome. This is a new phenomenon, since in the past the prevailing thought of economists and politicians was the conviction that, eventually, government would come out as the winner in the game. Today, one recognises that striking a balance between budgetary losses and gains from inflationary processes is a very difficult and complicated task. It is not astonishing, therefore, that the results of theoretical and empirical studies on these issues differ considerably.
KeywordsPublic Outlay Outstanding Debt Public Revenue Inflationary Process Modern Welfare State
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- It is impossible to indicate in a short note even the most important studies on the problems dealt with in the present paper. The following list is restricted to a few more recent (and perhaps not everywhere well known) articles which are of particular importance for the question whether government is a net gainer or loser from inflation.Google Scholar
- U. A. Münzer and P. B. Spahn, Liquidität und Körperschaftsteueraufkommen, Finanzarchiv, N.F., Vol. 32, p. 406 – 424 (1974).Google Scholar
- R. Lenk, R. Parsche and G. Spanakakis, ‘Auch der Staat kein Inflationsgewinner,’ Ifo-Schnelldienst, 29/1973 (München 1973).Google Scholar
- Neumark, ‘Impôt et inflation’, Collection d’essais en l’honneur de Jean Marchal (Paris 1975).Google Scholar
- A. Meier, ‘Geldwertstabilität aus der Sicht des öffentlichen Sektors,’ Stabilisierungspolitik in der Marktwirtschaft, Schriften des Vereins für Socialpolitik (Berlin, 1975).Google Scholar
- H. Pollak, ‘Einige Bemerkungen zum Referat von A. Meier’, ibid.Google Scholar
- W. Ehrlicher, ed., ‘Probleme der Indexbindung’, Heft 2 der Beihefte zu Kredit und Kapital (Berlin, 1974).Google Scholar
- J. Starbatty, ‘Der Staat: Inflationsgewinner oder Inflationsgeschädigter?’, Finanzarchiv, N.F. Vol. 33 (1975).Google Scholar
- Inflation, Economic Growth and Taxation, Institut International Roue de Finances Publiques, Saarbrücken, XXIXe Session, Congres de Barcelona 1973 (cf. particularly the papers by R. A. Musgrave, J. M. Buchanan, T. Stevers, H. Pollak and K. Messere. (Unfortunately this volume was published only after I had completed the present paper, but I could immediately see that Musgrave’s ideas to a large extent correspond with my own.)Google Scholar