A Frictionless View of U.S. Inflation
In Ben S. Bernanke and Julio J. Rotemberg, eds., NBER Macroeconomics Annual 1998 Cambridge MA: MIT press, p. 323-384. My first foray into the fiscal theory. It includes a proof that you can't test for regimes -- the government debt valuation equation and the money demand equation hold in both equilibria, and there is no Granger causality prediction. I also explain the intuition of the fiscal theory. The goal was to write a "Fiscal history", to understand the path of US inflation via the fiscal theory. That turns out to be harder than I thought, and is still an ongoing project. Published version (local). Direct link to published version (NBER)