Empirical studies of the "shoe-leather" costs of inflation are typically computed using M1 as a measure of money. Yet … minimized for a positive but moderate value of the inflation rate, thereby justifying a deviation from the Friedman rule in …

This paper uses neoclassical demand theory to calculate the welfare costs of inflation. It considers the demand … inter-related problems of estimation of money demand functions, instability of money demand relations, and monetary …-run welfare costs of inflation that is internally consistent with the data and models used …