Inflation, Welfare, and Public Goods

Gaetano Bloise, Sergio Currarini and Nicholas Kikidis

Journal of Public Economic Theory, 2002, vol. 4, issue 3, 369-386

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.

Date: 2002
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https://doi.org/10.1111/1467-9779.00103

Related works:
Working Paper: Inflation, welfare, and public goods (2002)
Working Paper: Inflation, welfare and public goods (1998)
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Persistent link: https://EconPapers.repec.org/RePEc:bla:jpbect:v:4:y:2002:i:3:p:369-386

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