02031cas a2200277 a 4500 AALejournalIMF015410 230101c9999 xx r poo 0 0eng d 5.00 USD 9781513528243 1018-5941 BD-DhAAL BD-DhAAL End, Nicolas. Deflation and Public Finances : Evidence from the Historical Records / Nicolas End, Sampawende Tapsoba, G. Terrier, Renaud Duplay. Washington, D.C. : International Monetary Fund, 2015. 1 online resource (41 pages) IMF Working Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students This paper examines the impact of deflation on fiscal aggregates. With deflation relatively rare in modern history, it relies mostly on the historical records, using a dataset panel covering 150 years and 21 advanced economies. Empirical evidence shows that deflation affects public finances mostly through increases in public debt ratios, reflecting a worsening in interest rate-growth differentials. On average, a mild rate of deflation increases public debt ratios by almost 2 percent of GDP a year, this impact being larger during recessionary deflations. Using a simulation model that accounts for composition effects and price expectations, we also find that, for European countries, a 2 percentage point deflationary shock in both 2015 and 2016 would lead to a deterioration in the primary balance of as much as 1 percent of GDP by 2019. Mode of access: Internet Duplay, Renaud. Tapsoba, Sampawende. Terrier, G. IMF Working Papers; Working Paper ; No. 2015/176 Full text available on IMF http://elibrary.imf.org/view/journals/001/2015/176/001.2015.issue-176-en.xml IMF e-Library