If firms borrow working capital to finance production, then nominal interest rates have a direct influence on inflation … empirical importance in explaining inflation dynamics in the US and in the euro area. …

reactiveness of inflation to the unemployment rate. In regard to a monetary union, the national unemployment multiplier in the …

The present paper explores the connection between inflation and unemployment in different models with fair wages both … function, more inflation lowers the unemployment rate, though to a declining extent. This is because firms respond to inflation … inflation on effort. A stronger effect of nflation on unemployment is also produced under varying as opposed to fixed capital …

This paper studies the welfare costs and the redistributive effects of inflation in the presence of idiosyncratic … money demand and the distribution of money holdings across households, and study the effects of inflation under the implied … inflation are on average 40% smaller compared to a complete markets, representative agent economy, and that inflation induces …

interaction affects the allocation and welfare. Regarding how banking affects the welfare costs of inflation: First, we find that …, with banking, inflation generates smaller welfare costs. Second, we show that, lowering inflation improves welfare not just … nature of intermediation cost is critical for accurately assessing the welfare gain of lowering the inflation target …

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 …