Title: Money, Debt and Prices in the UK 1705-1996 *
Abstract: After constructing a consistent series for the market value of UK Government debt, we use nearly 300 years of UK data to examine the effects of fiscal and monetary policy on the price level in the UK. In order to distinguish between Ricardian and non-Ricardian fiscal policy regimes the analysis focuses on three feedbacks: between government debt and budget surpluses, between debt and inflation and between money and inflation. There is no evidence that fiscal policy has affected prices, nor the exchange rate under the Gold Standard. The results from the VAR suggest that fiscal policy in the UK has operated under a Ricardian regime over the past 300 years or so. This implies that the price level has been determined by the forces of demand for and supply of money rather than those for government bonds.
Publication Year: 1999
Publication Date: 1999-01-01
Language: en
Type: article
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Cited By Count: 12
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