The US government's lack of a long-term plan to balance its books is having an inflationary impact on the wider economy, according to a Sveriges Riksbank working paper published today.

In Identifying Fiscal Inflation, Ferre De Graeve and Virginia Queijo von Heideke assess the theory that if the government is unable to support its debt with future fiscal surpluses, then inflation will increase to "erode" that debt.

The authors acknowledge that "despite the dire current fiscal situation" both