It is crucial that central banks and regulatory authorities be aware of effects of asset price inflation on the … backing loans fall in value. Rather than trying to gauge the effects of asset prices on core inflation, central banks may be …

Recently a market in options based on CPI inflation (inflation caps and floors) has emerged in the US. This paper uses … quotes on these derivatives to construct probability densities for inflation. We study how these pdfs respond to news … empirical pricing kernels. The options-implied densities assign considerably more mass to extreme inflation outcomes (either …

optimizing governments might want to repress the financial sector. We also explain why inflation may be negatively related to … intervention is modeled through the inflation tax. Our model has the implication that financial development reduces money demand …. Hence, if the government allows for financial development the inflation tax base, and the chance to collect seigniorage, is …

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 …

This paper examines the association between inflation, monetary policy and U.S. stock market conditions during the … episodes and find evidence that inflation and interest rate shocks had particularly strong impacts on market conditions in the … postwar era. Disinflation shocks promoted market booms and inflation shocks contributed to busts. We conclude that central …

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 …

fluctuations associated with these events are also discussed, as is their role in the recent surge of inflation, with a particular …

as the manifestation of excessive monetary injections [Krugman-Flood-Garber], the fiscal theory of inflation [Sargent …-finance optimizing problem. We shows that under conditions similar to those which prevailed in Russia and Argentina prior to their …