The paper argues that Lucas overestimates the Friedman-Bailey type of welfare cost of inflation and neglects other … of Lucas' estimate. The neglected welfare effects of inflation include an adverse Baumol-Tobin effect on growth and … between inflation, relative prices and structural change …

In this paper I attempt to clarify the nature of the losses associated with inflation within a conventional model of a … competitive economy. I shall argue that were inflation fully anticipated, it would be "almost neutral" provided (a) that the tax … States). However, unanticipated inflation may have significant effects …

sustained inflation are small relative to the costs of unemployment. If a temporary reduction in unemployment causes a permanent … increase in inflation, the present value of the resulting future welfare costs may well exceed the temporary short-run gain …. Previous analyses have underestimated the cost of a permanent increase in the inflation rate because they have ignored the …

banking sector. Taking these effects into account, a one percentage point increase in inflation has a welfare cost of 0 …

How far can shoe-leather go in explaining the welfare cost of inflation? Using a unique set of microeconomic data on … welfare cost of inflation analogous to Bailey's triangle, but based on a rigorous microeconomic framework. The welfare cost of … inflation varies considerably within the population, but never turns out to be very large (about 0.1 percent of consumption or …

We construct a simple model in which high inflation imposes welfare costs because it affects the ability of the … financial sector to screen between high and low cost producers. Consumers search for a low price and inflation reduces the … inflation there is a switch from a separating equilibrium to a pooling equilibrium, where financial institutions become unable …