Search and Price Dispersion in an Inflationary Economy

Chaim Fershtman and Arthur Fishman

No 275475, Foerder Institute for Economic Research Working Papers from Tel-Aviv University > Foerder Institute for Economic Research

Abstract: Ve present a simple overlapping generations search model of an inflationary economy in which money is the only store of value and identify an inflation based endogenously determined search cost. The latter reflects the fact that resources required for future consumption are random and are thus exposed to excessive erosion. Ve analyze the effect of the constant inflation rate on the equilibrium real price distribution, output and welfare. An increase in the rate of inflation increases production efficiency and may increase welfare.

Keywords: Financial Economics; Public Economics (search for similar items in EconPapers)
Pages: 42
Date: 1989-07
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:ags:isfiwp:275475

DOI: 10.22004/ag.econ.275475

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