ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846
-A A +A

Does the Government Budget Constraint Matter?

According to Economic Survey 1999-2000, "The inadequacy of exclusive reliance on broad money growth is also reflected in the coexistence of high monetary growth and low inflation" (p 49). We proffer an explanation that runs in terms of the price-setting behaviour of workers and firms. In the framework of a simple model, decreasing wage indexation is shown to be sufficient to provide the required result.

Subscribers please login to access full text of the article.

New 3 Month Subscription
to Digital Archives at

826for India

$50for overseas users

Get instant access to the complete EPW archives

Subscribe now

Comments

(-) Hide

EPW looks forward to your comments. Please note that comments are moderated as per our comments policy. They may take some time to appear. A comment, if suitable, may be selected for publication in the Letters pages of EPW.

Back to Top