Inflation adjusted nominal deficit: a note on Robert Barro’s definition

Vol. 23 No. 1 (2003)

Jan-Mar / 2003
Published January 1, 2003
PDF-English
PDF-English

How to Cite

Luporini, Viviane. 2003. “Inflation Adjusted Nominal Deficit: A Note on Robert Barro’s Definition”. Brazilian Journal of Political Economy 23 (1):154-59. https://doi.org/10.1590/0101-31572003-0725.

Inflation adjusted nominal deficit: a note on Robert Barro’s definition

Viviane Luporini
Professora Adjunta do Departamento de Economia da Universidade Federal Fluminense – UFF, Niterói/ RJ, Brasil.
Brazilian Journal of Political Economy, Vol. 23 No. 1 (2003), Jan-Mar / 2003, Pages 154-159

Abstract

This note discusses the concept of ‘inflation adjusted nominal deficit’ proposed by Robert Barro in light of a stock-flow consistent real deficit. It is argued that the calculation proposed by the author violates the principle of stock-flow consistency and leads one to the erroneous interpretation that a rise in the rate of inflation de- creases the government deficit in nominal terms.

JEL Classification: E31; E62.


Keywords: Inflation nominal deficit stock-flow