flows can have different rates of return; and (iii) an increase in inflation raises asset prices, lowers their returns, and … widens the rate-of-return differences between assets. On the normative side we show that there is a range of inflation rates …

explicit microeconomic foundations. We show the implied relation between inflation and unemployment can be positive or negative …

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 …

We study the effects of inflation in models with various trading frictions. The framework is related to recent search … model, under posting the cost of inflation is similar to previous estimates, around 1% of consumption. Under bargaining, it … is considerably bigger, between 3% and 5%. Under price taking, the cost of inflation depends on parameters, but tends to …

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 …