Chiu, Jonathan (contributor); Molico, Miguel (contributor) - 2007
This paper studies the long run welfare costs of inflation in a micro-founded model with trading frictions and costly … agent model, the welfare costs of inflation are significantly smaller due to distributional effects of inflation. The … welfare cost of increasing inflation from 0% to 10% is 0.62% of income for the U.S. economy and 0.20% of income for the …
