Public Sector Wage Cycles and the Co-Movement of the Fiscal Deficit and Inflation in Less-Developed Countries
用一个完美预见模型分析财政赤字与通货膨胀的联动，发现公共部门工资周期可能导致两者弱相关，对研究欠发达国家宏观政策有参考价值。
In this paper I analyze the co-variation of the fiscal deficit and inflation in a simple perfect foresight model that incorporates low- and high-wage cycles of equal depth and duration. When money and consumption are not extremely strong complements and the wage-cycle not extremely short-lived, inflation rises above its pre-stabilization level while the deficit is lower. The results thus argue that public sector wage cycles may underlie the weak empirical correlation of the deficit and inflation.