This paper estimates the efficiency consequences of interactions between nominal tax systems and inflation in open … capital movement and influencing domestic and foreign tax receipts, saving, and investment. The efficiency costs of inflation … economies. Domestic inflation changes after-tax real interest rates at home and abroad, thereby stimulating international …

. While a unilateral monetary expansion increases the production efficiency in each country, it affects terms of trade in … favor of one country against another depending on the currencies of price setting. We show that the increased world … production interdependence magnifies the efficiency-improvement effect while dampening the terms-of-trade effect. As a …

benchmark calibration, we estimate that the capital misallocation induced by these barriers reduces World GDP by 7%, compared to …-country inequality: the standard deviation of log capital per employee is 80% higher than it would be in a world without barriers to …