OxTalks will soon move to the new Halo platform and will become 'Oxford Events.' There will be a need for an OxTalks freeze. This was previously planned for Friday 14th November – a new date will be shared as soon as it is available (full details will be available on the Staff Gateway).
In the meantime, the OxTalks site will remain active and events will continue to be published.
If staff have any questions about the Oxford Events launch, please contact halo@digital.ox.ac.uk
Contrary to popular belief, inflation-indexed government debt can boost inflation in response to deficit shocks, conditional on a lack of sufficient future fiscal backing. I formalize this insight through a state-of-the-art calibrated HANK model with multiple asset types, showing that the annual inflationary effect of a 1% deficit-to-GDP shock increases by 0.5 percentage points when the share of inflation-indexed debt moves from zero to levels observed in the U.K. The main mechanism is that the price level becomes partially backward-looking through the presence of inflation-indexed debt. Empirical evidence from high-powered fiscal deficit shocks supports this finding, which has additional implications for the distinction between ‘fiscally-led’ mechanisms and ‘HANK-type’ mechanisms surpassing Ricardian equivalence.
