Welfare Costs of Inflation and Interest-Bearing Money

2001/02/01 by Mario Henrique Simonsen, Mário Henrique Simonsen, Rubens Penha Cysne · 1 citation
Economics, Econometrics and Finance · #Deflation #Economic Theory and Policy #Economic theories and models #Economics #Fiscal Policy and Economic Growth #Inflation (cosmology) #Keynesian economics #Macroeconomics #Market economy #Monetary economics #Monetary policy #Welfare

paper · doi:10.2307/2673873

openalex publication_date 2001/02/01 · openalex created_date 2025/10/10 · openalex updated_date 2026/07/29

Abstract

This note extends the Lucas' analysis of the welfare cost of inflation to an economy with interest-bearing deposits. Lower and upper bounds to Lucas' measure of the welfare cost of inflation are also provided. The upper bound is shown to lie between Lucas' measure of the welfare cost of inflation and the area under the money-demand curve.

Cited by

• On the Instability of Long‐Run Money Demand and the Welfare Cost of Inflation in the United States

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