The Welfare Costs of Inflation

No 783, Working Papers from Federal Reserve Bank of Minneapolis

Abstract: We revisit the estimation of the welfare costs of inflation originating from lack of liquidity satiation. We use data for the United States and several other developed countries. Our computations are heavily influenced by the recent experience of very low, even negative, short-term rates observed in the countries we study. We obtain estimates that range between 0.20% and 1.5% of lifetime consumption for the United States and find even higher values for some European countries.

Keywords: Money demand; Lower bound on interest rates (search for similar items in EconPapers)
JEL-codes: E41 E43 E52 (search for similar items in EconPapers)
Pages: 52
Date: 2021-09-24
New Economics Papers: this item is included in nep-cwa, nep-eec, nep-mac and nep-mon
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Citations: View citations in EconPapers (1)

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Related works:
Working Paper: The Welfare Costs of Inflation (2021)
Working Paper: The Welfare Costs of Inflation (2019)
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Persistent link: https://EconPapers.repec.org/RePEc:fip:fedmwp:93467

DOI: 10.21034/wp.783

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