Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
5058395 | Economics Letters | 2016 | 4 Pages |
Abstract
â¢We consider a perpetual youth model in which real balances provide utility.â¢Dynamic efficiency is consistent with a positive inflation rate.â¢The higher inflation, the larger is the bubble required to restore efficiency.
We consider a perpetual youth model in which real balances are an argument of the utility function. We show that dynamic efficiency is compatible with a positive inflation rate, and that the higher inflation, the larger is the size of the bubble required to remove the inefficiency.
Related Topics
Social Sciences and Humanities
Economics, Econometrics and Finance
Economics and Econometrics
Authors
Gianluca Femminis,