Inflation and welfare in an OLG economy with a privately provided public good

In this paper 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.

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Year of publication:	2001
Authors:	Bloise, Gaetano ; Currarini, Sergio ; Kikidis, Nicholas
Publisher:	Milano : Fondazione Eni Enrico Mattei (FEEM)
Subject:	Öffentliche Güter \| Privatisierung \| Inflation \| Wohlfahrtsanalyse \| Overlapping Generations \| Theorie \| Optimal inflation \| public goods \| voluntary contributions

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Series:	Nota di Lavoro ; 12.2001
Type of publication:	Book / Working Paper
Type of publication (narrower categories):	Working Paper
Language:	English
Other identifiers:	hdl:10419/155175 [Handle]
Classification:	H41 - Public Goods ; E52 - Monetary Policy (Targets, Instruments, and Effects) ; D91 - Intertemporal Consumer Choice; Life Cycle Models and Saving
Source:	EconStor

Persistent link: https://www.econbiz.de/10011608774