Rethinking the welfare cost of inflation

Ben Craig and Guillaume Rocheteau

Economic Commentary, 2005, issue Mar

Abstract: New models of monetary economies, developed in the last 15 years, suggest that traditional measures of the welfare cost of inflation may underestimate the true loss that inflation inflicts on society. According to these models, the cost of 10 percent inflation ranges from 1 to 5 percent of real income.

Keywords: Inflation; (Finance) (search for similar items in EconPapers)
Date: 2005
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