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S5 Ep28: Inflation and Europe’s public finances

VoxTalks Economics

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Is Inflation Good News for Public Finance?

I think this story fits well. It demands riven inflation but to day we have more supplied driven inflation, at least in the area. And it makes a difference to the public finances that a large part of this inflation at the moment is imported inflation. The short story is that when the inflation comes from supply side effects, especially from an increase in the of imported goods, then this is not good news for public finance. But after a while, everything is in dex and so you have reduced tax revenues due to the negative impact of the shock on the economy.

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