Economics & Sociology

ISSN: 2071-789X eISSN: 2306-3459 DOI: 10.14254/2071-789X
Index PUBMS: f5512f57-a601-11e7-8f0e-080027f4daa0
Article information
Title: Interconnections between Public Indebtedness and Inflation in Contemporary Economies
Issue: Vol. 7, No 4, 2014
Published date: 20-11-2014 (print) / 20-11-2014 (online)
Journal: Economics & Sociology
ISSN: 2071-789X, eISSN: 2306-3459
Authors: Irina Bilan
Angela Roman
Keywords: public indebtedness, inflation, money supply, debt amortization
DOI: 10.14254/2071-789X.2014/7-4/4
Index PUBMS: 1fd319a2-aa13-11e7-8eae-080027f4daa0
Language: English
Pages: 59-70 (12)
JEL classification: E31, E51, H63

This paper aims to analyze the specific interconnections established between public indebtedness and inflation, both from the perspective of considering inflation as a result of public borrowing and of voluntarily promoting inflation to reduce the (real) value of public debtand to ease its burden. It identifies the channels through which these effects are occurring, it determines the conditions of their manifestation and evaluates their relevance for different (developed and developing) contemporary economies. Although promoting irrational public borrowing may lead to inflation, such a correlation proved to be quite difficult to identify in the practice, especially for currently developed economies.