Replication data for: Rebalancing Frequency and the Welfare Cost of Inflation
- Silva, André C.
AbstractCash-in-advance models usually require agents to reallocate money and bonds in fixed periods. Every month or quarter, for example. I show that fixed periods underestimate the welfare cost of inflation. I use a model in which agents choose how often they exchange bonds for money. In the benchmark specification, the welfare cost of 10 percent instead of 0 inflation increases from 0.1 percent of income with fixed periods to 1 percent with optimal periods. The results are robust to different preferences, to different compositions of income in bonds or money, and to the introduction of capital and labor. (JEL: E30, E40, E50)
Is supplement to
DOI: 10.1257/mac.4.2.153 (Text)
Silva, André C. “Rebalancing Frequency and the Welfare Cost of Inflation.” American Economic Journal: Macroeconomics 4, no. 2 (April 2012): 153–83. https://doi.org/10.1257/mac.4.2.153.
- ID: 10.1257/mac.4.2.153 (DOI)
Update Metadata: 2020-05-18 | Issue Number: 2 | Registration Date: 2019-10-13