This paper applies new computational methods for studying nonstationary dynamics to reevaluate the welfare cost of … equilibria, I measure the welfare cost of inflation by explicitly modeling the transitional dynamics that arise following a … change in monetary policy. Transitional dynamics are shown to increase the welfare cost of inflation substantially. Also …

This paper investigates the relationship between money growth, inflation, and productive activity in a general … equilibrium model where search frictions motivate the transactions role of money. The use of a multiple matching technique, where …-theoretic environment with divisible money and goods. We find that in such a setting, a positive feedback between work and shopping effort …

operates and the rate of inflation it experiences. It also explores whether there are other properties of inflation, money, and … basis for our study is price, money, and output data for 15 countries that have operated under both types of monetary … we are able to establish several facts about the differences in inflation, money growth, and output growth between …

This paper investigates the welfare effects of inflation in economies with search frictions and menu costs. We first … analyze an economy where there is no transaction demand for money balances: Money is a mere unit of account. We determine a … transaction role for money. In the absence of menu costs, the Friedman rule is optimal. In the presence of menu costs, the optimal …