the welfare cost inflation in iran

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 ...

Liquidity, Redistribution, and the Welfare Cost of Inflation

This paper studies the long run welfare costs of inflation in a micro-founded model with trading frictions and costly liquidity management. Agents face uninsurable idiosyncratic uncertainty regarding trading opportunities in a decentralized goods market and must pay a fixed cost to re-balance their liquidity holdings in a centralized liquidity market. By endogenizing the participation decision ...

On the Welfare Cost of Inflation in a New Keynesian Model with a Cash-in-advance Constraint: The Case of Iran

T he welfare cost of inflation in a new Keynesian model has been studied in this article. Nominal prices and wages are subjected to Rotenberg's adjustments in the benchmark model. In addition, this study uses the CIA model to compare the welfare cost of seigniorage tax and consumption tax. The model is calibrated for the Iranian economy and the results of the calibration are as follow...

Redistribution of Nominal Wealth and the Welfare Cost of Inflation∗

This paper considers the revaluation of nominal wealth as a channel for aggregate and welfare effects of inflation. In a calibrated OLG model, an inflation episode is viewed as an unanticipated shock to the wealth distribution that hurts old lenders and helps young borrowers. While the redistribution shock is zero-sum, households respond asymmetrically, which generates a decrease in labor suppl...

Welfare Costs of Inflation in a Menu Cost Model

Recent years have seen substantial progress in our understanding of pricing decisions at the micro level. Access to large scale data sources on prices at the level of individual products has given us rich information on how frequently prices change, by what magnitudes, and how the aggregation of price changes in individual firms maps into aggregate inflation (see, among many others, Mark Bils a...

The Relation Between Inflation and Inflation Uncertainty In Iran