emergence of giant economies leads to a classic terms of trade shock that sets in motion a structural transformation and perhaps …

evidence?) showing that price stability (or even mild deflation) is "better." This paper provides a simple model in which a … 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 …

, in particular by capturing the procyclic movements of monetary aggregates, inflation and interest rates. And its … application to analyse banking episodes indicates that the credit shock helps explain cycle behavior during the US financial …

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

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 …