82-91

• Ίκκος, Άρης Δ.

A monetarist model of the economy is constructed and it is shown, within the context of that model, that a reduction in the money supply can lead to a rise in inflation in the future as Sargent and Wallace (1984) predicted, only if fiscal policy is defined as exclusive of interest rate payment on debt. The conclusions of the paper are directly relevant to current Greek macroeconomic problems and the solutions proposed for them, in that they point out the importance of formulating goverment policy on receipts and expenditures after thorough consideration of interest payments on past debt and after giving careful attention to the money-bond mix of financing the deficit.

• Economics and Business
• Computer and information sciences

• Macroeconomics
• Statistics

public economics

Περιέχει βιβλιογραφία, This article is based on chapter 2 of the author's Ph. D. thesis. The author would like to thank David Currie and Andres Drobny for their many helpful comments and suggestions. Of cource they have no share in any errors of omission or commission made by the author.