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 …

inflation rate, with and with- out an increase in the risk premium on equities, was then simulated with a number of model … cost was 3 percentage points less than that for corporate capital) and the manner in which inflation magnifies it (the … finance instruments would overcome this reallocation but at the expense of corporate capital. Only a reduction in inflation or …

This paper develops a model with endogenous financial adaptation. With a representative agent, inflation and welfare … increase upon introduction of financial adaptation. Once we allow for agents' heterogeneity, we can show that inflation still … level of government spending and the inflation rate. With heterogeneous agents, if the government cares for the low income …