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 …

the author. The first part uses a theorem in control theory (Arrow's sufficiency theorem) to provide sufficiency … the paper provides a closed-form solution to the general equilibrium expression of the welfare costs of inflation when the … the general-equilibrium and Bailey's partial-equilibrium estimates of the welfare losses due to inflation. Again, in Lucas …