Simonsen, Mario Henrique; Cysne, Rubens Penha - In: Journal of Money, Credit and Banking 33 (2001) 1, pp. 90-100
This note extends the Lucas' analysis of the welfare cost of inflation to an economy with interest-bearing deposits …. Lower and upper bounds to Lucas' measure of the welfare cost of inflation are also provided. The upper bound is shown to lie … between Lucas' measure of the welfare cost of inflation and the area under the money-demand curve. …