A Search Model of Unemployment and Inflation In this paper, I introduce money in the standard labor-matching model (Mortensen and Pissarides 1999, Pissarides 2000). A double coincidence problem makes Fiat Money necessary as a medium of exchange. In the long-run, a rise in the rate of money growth leads to higher inflation and higher unemployment, so the long-run Phillips curve is not vertical. ...

We develop a theory of money and credit as competing payment instruments, then put it to work in applications. Buyers can use cash or credit, with the former (latter) subject to the inflation tax (transaction costs). Frictions making the choice of payment method interesting also imply equilibrium price dispersion, and together these deliver closed-form solutions for money demand. The model can ...

This essay is a contribution to the empirical literature on the effect of inflation tax on capital structure. A simple empirical model considering the main results of the current theoretical development is studied, using microdata from a number of American corporations.

Taxing capital in open economies su¤ers from a rather wasteful tax competition. According to Konrad & Schjelderup (1999) harmonizing capital income taxes within a subgroup of countries is bene…cial to all countries. Although economists and politicians advocate a coordinated tax policy within a federation or a federal system like the EU they favor national tax sovereignty over a harmonization of...

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...

Fiscal considerations and commitment drive the choice of monetary policy regime, especially for developing countries. I survey the fiscal foundations of price determination, and study the maximize-inflation-tax, interest rate rule, peg and currency board, and dollarization regime. Since nominal debt acts like equity for the government, the dollarization question is like the question whether a f...

the study investigates the impact of taxation on the nigerian economy for the period 1994 -2012.the dependent variables used in the model includes: gross domestic product (gdp) as a parameter for measuring economic growth, inflation and unemployment. the objective is this study is to determine how taxation affects these macroeconomic variables. to avoid spurious results, the data set collected ...

Do political and fiscal decentralization make it easier or harder to control inflation? If high inflation reflects the time inconsistency problem, devolving power might restrict the center’s ability to renege on promises of monetary stability, thus reducing inflation. If inflation results from failure to coordinate on a stabilization plan, devolving power to numerous regional governments should...