Uncertainty, Inflation, and Welfare

Uncertainty, Inflation, and Welfare

Bank of Canada working papers are theoretical or empirical works-in-progress on subjects in economics and finance. The views expressed in this paper are those of the authors. No responsibility for them should be attributed to the Bank of Canada. Abstract This paper studies the welfare costs and the redistributive effects of inflation in the presence of idiosyncratic liquidity risk, in a micro-f...

The Relation Between Inflation and Inflation Uncertainty In Iran

Inflation, Output and Welfare

This paper studies the effects of anticipated inflation on aggregate output and welfare within a search-theoretic framework. We allow money-holders to choose the intensities with which they search for trading partners, so inflation affects the frequency of trade as well as the quantity of output produced in each trade. We consider the standard pricing mechanism for search models, i.e., ex post ...

The Welfare Cost inflation in Iran

The purpose of this paper is to estimate the welfare cost of inflation in Iran. We first use the long-horizon regression approach developed by Fisher and Seater (1993) to obtain an estimate of the inflation rate elasticity of money demand and then the Baily’s consumer surplus approach to calculate the welfare cost function. The results show that reducing inflation rate from 40% to 0% increases ...

Inflation, Inflation Uncertainty and Output in Tunisia

Reply : We think that the Tunisian case is also interesting for a broad audience. Tunisia has made important progress over the last decade toward establishing a sound bank intermediation, deepening its financial market, mobilizing domestic financing, and using indirect market-based monetary policy instruments. Monetary policy is useful to obtain a stable macroeconomic environment in favor of a ...