between money, inflation, the interest rate, and exchange rate depreciation depends on the inclusion of a quot …;ratchetquot; variable that captures irreversible effects of inflation. Short-run dynamics differ markedly from the long run. Algorithmically …

I apply mechanism design to quantify the cost of inflation that can be attributed to monetary frictions alone. In an … moderate inflation is zero. This result is robust to different assumptions regarding the observability of money holdings, the …