We measure the heterogeneous welfare effects of the recent inflation surge across households in the Euro Area. A simple … framework illustrating the numerous channels of the transmission mechanism of surprise inflation to household welfare guides our …; (ii) this inflation episode resembles an age-dependent tax, with the elderly losing up to 20%, and roughly half of the 25 …

The paper argues that Lucas overestimates the Friedman-Bailey type of welfare cost of inflation and neglects other … of Lucas' estimate. The neglected welfare effects of inflation include an adverse Baumol-Tobin effect on growth and … between inflation, relative prices and structural change …

In a previous attempt to articulate the costs of inflation (Leigh-Pemberton (1992)), the Bank of England outlined the … following costs of a fully-anticipated inflation: - the cost of economising on real money balances -- so-called shoe … these costs when moving from 2% inflation to price stability in the U.S. Feldstein concluded that the permanent welfare …

How far can shoe-leather go in explaining the welfare cost of inflation? Using a unique set of microeconomic data on … welfare cost of inflation analogous to Bailey's triangle, but based on a rigorous microeconomic framework. The welfare cost of … inflation varies considerably within the population, but never turns out to be very large (about 0.1 percent of consumption or …

going from two" percent inflation to price stability are about one percent of GDP. Discounting this growing" stream of …Going from low inflation to price stability involves a short term loss (associated with the" higher unemployment rate … required to reduce the inflation) and results in a series of welfare gains" in all future years. The primary source of these …

This paper estimates the efficiency consequences of interactions between nominal tax systems and inflation in open … economies. Domestic inflation changes after-tax real interest rates at home and abroad, thereby stimulating international … capital movement and influencing domestic and foreign tax receipts, saving, and investment. The efficiency costs of inflation …

Inflation has been accused of causing distortionary price and wage fluctuations (sand) as well as lauded for … be distinguished from each other in a labor market by the following identification strategy: inflation-induced deviations … among employers' mean wage changes represent unintended intramarket distortions (sand), while inflation-induced, inter …

We construct a simple model in which high inflation imposes welfare costs because it affects the ability of the … financial sector to screen between high and low cost producers. Consumers search for a low price and inflation reduces the … inflation there is a switch from a separating equilibrium to a pooling equilibrium, where financial institutions become unable …

inflation, and that the optimal monetary policy is that which maximizes real balances. We also show that the real rate of … interest is not invariant to monetary policy: inflation lowers the real rate …