Recent monetary search models emphasize that the real effects of inflation via its impact on price dispersion depend on … the level of search costs and, thus, on the level of market integration. For less integrated markets, the inflation …-price dispersion nexus is predicted to be asymmetrically V-shaped which implies an optimal inflation rate above zero. For highly …

Monetary search theory implies that the real effects of inflation via its impact on price dispersion depend on the … level of search costs and, thus, on the level of market integration. For less integrated markets, the inflation …-price dispersion nexus is predicted to be asymmetrically V-shaped which results in an optimal inflation rate above zero. For highly …

dispersion reduces welfare by creating mismatch between posted prices and money balances. Inflation exacerbates this welfare loss …

Many sticky-price models suggest that relative price distortion is one of the major costs of inflation. We show that … this resource misallocation is costly even at quite low rates of inflation. This is because inflation strongly affects … has a persistent, negative hump-shaped impact on inflation, but may have a positive hump-shaped impact on output. Observed …