A general-equilibrium closed-form solution to the welfare costs of inflation
This article presents a closed-form solution to Lucas's (2000) general-equilibrium expression for the welfare costs of inflation. The formula applies when the money demand is bi-logarithmic. An analytical solution for the difference between Bailey's (1956) partial-equilibrium measure and Lucas's general-equilibrium measure is also provided. In Lucas's original work, only numerical solutions are offered to these questions.
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| Main Author: | |
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| Format: | Digital revista |
| Language: | English |
| Published: |
Fundação Getúlio Vargas
2005
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| Online Access: | http://old.scielo.br/scielo.php?script=sci_arttext&pid=S0034-71402005000200003 |
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