Could engineering higher inflation help manage fiscal deficits?

Federal Reserve Bank of Chicago

A co-ordinated effort by fiscal and monetary authorities to engineer “controlled inflation” could be a solution to the ballooning fiscal deficits created by pandemic-related spending, research published by the Federal Reserve Bank of Chicago finds.

The paper proposes a policy that consists of the government separating its spending into two distinct budgets – a “regular budget”, backed by typical fiscal adjustments such as taxes and spending, and a “emergency budget”.

In contrast to the regular

Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.

To access these options, along with all other subscription benefits, please contact [email protected] or view our subscription options here:

You are currently unable to copy this content. Please contact [email protected] to find out more.

To continue reading...

You need to sign in to use this feature. If you don’t have a Central Banking account, please register for a trial.

Sign in
You are currently on corporate access.

To use this feature you will need an individual account. If you have one already please sign in.

Sign in.

Alternatively you can request an individual account here: