strict inflation targeting rule implements the optimal policy. However, when the nominal interest rate is constrained at the … ZLB, strict inflation targeting is suboptimal and admits output hysteresis. A new policy rule that targets output …

The effect of a permanent change of inflation on the distribution of wealth is analyzed in a general equilibrium OLG … of inflation results in a lower stock market participation rate; in addition, the distribution of wealth becomes more … anticipated inflation are considerably lower than in Imrohoroglu (1992). …

The paper presents the welfare cost of inflation in a banking time economy that models exchange credit through a bank … welfare cost of a 10% inflation rate instead of zero, for comparison to other estimates, as well as the cost of a 2% inflation … rate instead of a zero inflation rate. The zero rate is specified as the US inflation rate target in the 1978 Employment …

inflation-tax rate) or the reserve requirement ratio (the inflation-tax base). We first derive conditions under which each of …