Economics at your fingertips  

Inflation effects on capital accumulation in a model with residential and non-residential assets

Katerina Koka

The B.E. Journal of Macroeconomics, 2014, vol. 14, issue 1, 28

Abstract: We study aggregate effects on capital accumulation of changes in the permanent rate of inflation in a model that incorporates both residential and non-residential capital. The framework is a dynamic general equilibrium life-cycle economy populated by heterogeneous individuals with respect to age, income and homeownership status. Inflation raises the non-residential capital income tax burden, affects the user cost of housing capital and raises the opportunity cost of holding money. A numerical analysis is provided based on parameter values from the US economy. We find that housing capital and inflation exhibit a positive correlation while inflation reduces savings in business capital. It is shown that this outcome arises from the interaction of inflation with individual tenure decisions and a number of characteristics and tax provisions available in the housing market.

Date: 2014
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link) (text/html)
For access to full text, subscription to the journal or payment for the individual article is required.

Related works:
Working Paper: Inflation effects on capital accumulation in a model with residential and non-residential assets (2014) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link:

Ordering information: This journal article can be ordered from

DOI: 10.1515/bejm-2013-0149

Access Statistics for this article

The B.E. Journal of Macroeconomics is currently edited by Arpad Abraham and Tiago Cavalcanti

More articles in The B.E. Journal of Macroeconomics from De Gruyter
Bibliographic data for series maintained by Peter Golla ().

Page updated 2023-08-07
Handle: RePEc:bpj:bejmac:v:14:y:2014:i:1:p:28:n:23