Welfare cost of inflation
id:
welfare-cost-of-inflation-303-11019868
title:
Welfare cost of inflation
text:
In macroeconomics, the welfare cost of inflation comprises the changes in social welfare caused by inflation. The traditional approach, developed by Bailey (1956) and Friedman (1969), treats real money balances as a consumption good and inflation as a tax on real balances. This approach measures the welfare cost by computing the appropriate area under the money demand curve. Fischer (1981) and Lucas (1981), find the cost of inflation to be low. Fischer computes the deadweight loss generated by a
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wiki
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encyclopedia
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original url:
https://en.wikipedia.org/wiki/Welfare_cost_of_inflation
date created:
date modified:
2023-11-07T20:51:02Z
main entity:
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13
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