The cost of inflation: A mechanism design approach

• 成果类型: Article
• 署名作者: Rocheteau, Guillaume
• 署名单位: University of California System; University of California Irvine; Federal Reserve System - USA; Federal Reserve Bank - Cleveland
• 刊物名称: JOURNAL OF ECONOMIC THEORY
• ISSN/ISSBN: 0022-0531
• DOI: 10.1016/j.jet.2012.01.016
• 发表日期: 2012
• 页码: 1261-1279
• 关键词: Cost of inflation; Pairwise trades; Optimal mechanism

摘要

I apply mechanism design to quantify the cost of inflation that can be attributed to monetary frictions alone. In an environment with pairwise meetings, the money demand that is consistent with an optimal, incentive feasible allocation takes the form of a continuous correspondence that can fit the data over the period 1900-2006. For such parameterizations, the cost of moderate inflation is zero. This result is robust to the introduction of match-specific heterogeneity and endogenous participation decisions. (C) 2012 Elsevier Inc. All rights reserved.