A cost-benefit analysis of going from low inflation to price stability in Spain

José Manuel González-Páramo and José Viñals
Authors registered in the RePEc Author Service: Juan J. Dolado

UC3M Working papers. Economics from Universidad Carlos III de Madrid. Departamento de Economía

Abstract: This paper performs a cost-benefit analysis of moving from low inflation (roughly 3.5 percent) to price stability (about 1.5 percent) in Spain. Estimates of the costs (in terms of output losses) and the benefits (resulting from lower distortions in the tax system) are compared and evaluated. According to our results, going from low inflation to price stability in Spain seems a worthy enterprise, yielding an expected net beneficial permanent effect of about 0.7-1.0 percentage points of GDP per year in the more reasonable scenarios.

Keywords: Sacrifice; ratio; Deadweight; loss; Capital; income; taxes (search for similar items in EconPapers)
Date: 1997-05
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Citations: View citations in EconPapers (6)

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Related works:
Chapter: A Cost-Benefit Analysis of Going from Low Inflation to Price Stability in Spain (1999)
Working Paper: A Cost-Benefit Analysis of Going from Low Inflation to Price Stability in Spain (1997)
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Persistent link: https://EconPapers.repec.org/RePEc:cte:werepe:6036

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