Inflation, Welfare, and Public Good

Gaetano Bloise, Sergio Currarini () and Nicholas Kikidis

Journal of Public Economic Theory, 2002, vol. 4, issue 3, pages 369-86

Abstract: In this article we study the welfare effects of monetary policy in a simple overlapping generation economy in which agents voluntarily contribute to a public good. Inflation has two effects at equilibrium: it increases voluntary contributions and it misallocates private consumption across time. We show that the aggregate effect is welfare-improving for "not too large" inflation rates. Moreover, there exists an optimal inflation rate. Copyright 2002 by Blackwell Publishing Inc.

Date: 2002

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Working Paper: Inflation, welfare and public goods (1998)
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