Artigo Acesso aberto Revisado por pares

Cost of inflation in inventory theoretical models

2018; Elsevier BV; Volume: 32; Linguagem: Inglês

10.1016/j.red.2018.11.001

ISSN

1096-6099

Autores

Fernando Álvarez, Francesco Lippi, Roberto Robatto,

Tópico(s)

Economics of Agriculture and Food Markets

Resumo

We show that the area under the long-run demand curve for money approximates the welfare cost of inflation for a large class of inventory theoretical models of money demand. The class of inventory models considered has a general stochastic structure of the net cash expenditures, as well as of the fixed/variable cost of withdrawing and depositing money. Thus, our framework nests a large number of models that have been studied in the literature. The results complement those obtained by Lucas (2000) for money-in-the-utility function and for shopping-time models.

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