The classical Fisher equation asserts that in a nonstochastic economy, the inflation rate must equal the difference … inflation replaced by the harmonic mean of the growth rate of money. Except for logarithmic utility, we show that on almost … every path the long-run rate of inflation is strictly higher than it would be in the nonstochastic world obtained by …

for consumption in each period before knowing their income, then there is no inflation. However, there is an inflationary … inflation …