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Finance and Economics Discussion Series: Inflation and the Size of Government
Paperback
EconomicsInvesting & FinanceGeneral Political Science
ISBN13: 9781298050182
Publisher: Scholar's Choice
Published: Feb 16 2015
Pages: 46
Weight: 0.17
Height: 0.10 Width: 6.14 Depth: 9.21
Language: English
It is commonly supposed in public and academic discourse that inflation and big government are related. We show that economic theory delivers such a prediction only in special cases. As an empirical matter, inflation is significantly positively related to the size of government mainly when periods of war and peace are compared. We find a weak positive peacetime time series correlation between inflation and the size of government and a negative cross-country correlation of inflation with non-defense spending.
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