the inertial response of inflation. The model incorporates labor market frictions, capital accumulation, and nominal price …

government sometimes uses the inflation tax because it is the only way to balance its budget. Thus, inflation occurs, at least … two sources of revenue, a flat-rate tax on labor income and the inflation tax. The key assumption is that the tax on labor … income cannot vary over time. The government can issue debt, however. Thus, when spending is high, it can use the inflation …

, in particular by capturing the procyclic movements of monetary aggregates, inflation and interest rates. And its …

buy the market good. An increase in inflation raises the price of the corruption service, reduces the non-market good …

, 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 …