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Most recent Working Papers
Working Papers present research work by both Danmarks Nationalbank’s employees and our partners. Working Papers are primarily targeted at professionals and people with an interest in central banking research as well as economics and finance in a broader sense.
Working Paper: A Fiscal Theory of Persistent Inflation
We develop a model with partially unfunded debt to propose a fiscal theory of persistent inflation. After the pandemic, unfunded fiscal shocks sustain the recovery, but also cause a persistent increase in inflation. The model predicts the inflationary effects of the ARPA stimulus out of sample and using real-time data.