Heterogeneity, decentralized trade, and the long-run real effects of inflation

• 成果类型: Article
• 署名作者: Jin, Gu; Zhu, Tao
• 署名单位: Central University of Finance & Economics; Hong Kong University of Science & Technology
• 刊物名称: JOURNAL OF ECONOMIC THEORY
• ISSN/ISSBN: 0022-0531
• DOI: 10.1016/j.jet.2022.105439
• 发表日期: 2022
• 关键词: heterogeneity; Bilateral Bargaining; inflation; INEQUALITY; welfare

摘要

Real effects of long-run inflation are studied in a standard matching model of money. Depending on the underlying policy, inflation can increase output but decrease ex ante social welfare or can do the opposite. Inflation makes the distribution of wealth more concentrated at the very top. When facing a potential policy change, the poor are much more sensitive to which policy may be adopted than the rich. Decentralized trade plays a critical role in these findings by amplifying the individual risk on labor income earning. (C) 2022 Elsevier Inc. All rights reserved.