Measures of the welfare cost of inflationa complete ordering

Resumo

This paper presents three contributions to the literature on the welfare cost of ináation. First, it introduces a new sensible way of measuring this cost - that of a compensating variation in consumption or income, instead of the equivalent variation notion that has been extensively used in empirical and theoretical research during the past fiftt years. We find this new measure to be interestingly related to the proxy measure of the shopping-time welfare cost of ináation introduced by Simonsen and Cysne (2001). Secondly, it discusses for which money-demand functions this and the shopping-time measure can be evaluated in an economically meaningful way. And, last but not least, it completely orders a comprehensive set of measures of the welfare cost of ináation for these money-demand specification. All of our results are extended to an economy in which there are many types of monies present, and are illustrated with the log-log money-demand specification.

Ficha do documento

Tipo

Dissertação

Ano

2007

Instituição

Fundação Getulio Vargas

Fonte

Repositório da FGV

Idioma

Inglês

Acesso

Acesso aberto

Identificador

oai:repositorio.fgv.br:10438/7865

Temas

Economia

Palavras-chave

EconomiaInflação