03 - John Cochrane on Finance, the Fiscal Theory of the Price Level, and Blogging
Macro Musings with David Beckworth
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The Fiscal Theory Explains the Vulnerability of Money
Fiscal theory says that the law theory is pretty much irrelevant. What matters is the total amount of government debt relative to the government's willing to soak up that debt with tax payment. And when they have faith in the government's ability to repay debt as all maturity, then inflation goes down.
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