Endogeneidade do déficit público à inflação: implicações do déficit orçamentário potencial num modelo tipo Cagan

• Autor(a) principal: Bender, Siegfried
• Data de Publicação: 1998
• Tipo de documento: Artigo
• Idioma: por
• Título da fonte: Estudos Econômicos (São Paulo)
• Texto Completo: https://www.revistas.usp.br/ee/article/view/161452
• topic: potential budgetary deficit; operational deficit; inflation; Cagan model; déficit orçamentário potencial; deficit operacional; inflação; modelo Cagan

In order to contexfalize the concept of potential budgetary deficit, we begin discussingin a form of brief revision the existent relationships between some of the main conceptsof public deficit. We go on explaining the new concept of potential budgetary deficitexposed in Bacha (1994) and we used it to derive its implications in a Cagan-type modelfor high inflation economies. Particularly, the equilibrium conditions and the inflationarydynamics are analyzed in this model with the public deficit in real terms being inverselyendogenous to inflation, just as it is sustained by the hypothesis of the potentialbudgetary deficit. The obtained results show that only with that kind of endogenity of thedeficit to inflation can we obtain a substantive modification of the qualitative results ofthe equilibrium conditions and of the inflationary dynamics, in relation to those usuallyobtained in Cagan-type models. In first place, there will always be at least oneinflationary equilibrium associated to any possible level of potential budgetary deficit. Insecond place, a hyperinflation situation can now happens with rational expectationsand money demand Cagan-type, even in presence of instantaneous adjustment of themoney market and absence of rigidity of prices and/or wages.