Using a public finance approach, this study investigates welfare costs between seignorage and consumption taxes in a standard growth model. One of these two taxes is used to finance exogenous public spending to balance the government budget. The steady-state welfare cost of consumption taxes is...

In an economy with consumption externalities, existing studies find that a competitive equilibrium is efficient in the long run and remains efficient in transitions if preferences are homothetic. This paper revisits the efficiency issue in an otherwise standard one-sector growth model where...

This paper studies the dynamic relationship between inflation and output growth in neoclassical growth models with endogenous cash constraints. We show this dynamic relationship is negative if the degree of cash constraints on investment is smaller than the degree of cash constraints on...