This paper investigates the welfare and output effects of inflation in a monetary economy with search frictions and … post prices. If prices can be adjusted at no cost, an increase in inflation reduces both the frequency and the intensity of … trades, as well as welfare. In the presence of menu costs, inflation can raise both the intensity and the frequency of trades …

, as well as the distribution of money. As inflation decreases, agents are induced to participate less frequently in the … participation and higher heterogeneity in money holdings across agents. The welfare costs of inflation implied are different from … previous papers in the literature since inflation can distort the agents consumption profile, affect market participation, and …

This paper studies the long-run effects of anticipated inflation on output and welfare within a search … notions of competitive pricing. If prices are bargained over ex-post, an increase in inflation reduces buyers' search … markets clear, it is possible for a mild inflation to increase search intensities, output, velocity and welfare. The …