DP1121 Causality Implications of the Public-Finance Approach to Inflation and Seigniorage
|Author(s):||Behzad Diba, Philippe Martin|
|Publication Date:||January 1995|
|Keyword(s):||Granger Causality, Inflation, Public Finance, Seigniorage|
|Programme Areas:||International Macroeconomics|
|Link to this Page:||cepr.org/active/publications/discussion_papers/dp.php?dpno=1121|
Recent empirical tests of dynamic optimal seigniorage models focus on their `smoothing' and long-run implications. The models also imply that the optimal policies are forward looking; that is seigniorage revenues depend on expected future government expenditures. We report causality tests of forward-looking policies for Germany, France, Italy, the United Kingdom and the United States.