Inflation, Welfare, and Public Good.
In this article we study the welfare effects of monetary policy in a simple overlapping generation economy in which agents voluntarily contribute to a public good. Inflation has two effects at equilibrium: it increases voluntary contributions and it misallocates private consumption across time. We show that the aggregate effect is welfare-improving for "not too large" inflation rates. Moreover, there exists an optimal inflation rate. Copyright 2002 by Blackwell Publishing Inc.
Year of publication: |
2002
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Authors: | Bloise, Gaetano ; Currarini, Sergio ; Kikidis, Nicholas |
Published in: |
Journal of Public Economic Theory. - Association for Public Economic Theory - APET, ISSN 1097-3923. - Vol. 4.2002, 3, p. 369-86
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Publisher: |
Association for Public Economic Theory - APET |
Saved in:
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