Rebalancing Frequency and the Welfare Cost of Inflation

• 成果类型: Article
• 署名作者: Silva, Andre C.
• 署名单位: Universidade Nova de Lisboa
• 刊物名称: AMERICAN ECONOMIC JOURNAL-MACROECONOMICS
• ISSN/ISSBN: 1945-7707
• DOI: 10.1257/mac.4.2.153
• 发表日期: 2012
• 页码: 153-183
• 关键词: transactions demand; Friedman rule; money; cash; equilibrium; GROWTH; MODEL; BEHAVIOR; velocity; shocks

摘要

Cash-in-advance models usually require agents to reallocate money and bonds in fixed periods. Every month or quarter, for example. I show that fixed periods underestimate the welfare cost of inflation. I use a model in which agents choose how often they exchange bonds for money. In the benchmark specification, the welfare cost of 10 percent instead of 0 inflation increases from 0.1 percent of income with fixed periods to 1 percent with optimal periods. The results are robust to different preferences, to different compositions of income in bonds or money, and to the introduction of capital and labor. (JEL: E30, E40, E50)