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Money and Growth Revisited : Measuring the Costs of Inflation in an Endogenous Growth Model

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  • Gomme, P.

Abstract

Results in Lucas (1987) suggest that if public policy can affect the growth rate of the economy, the welfare implications of alternative policies will be large. In this paper, a stochastic, dynamic general equilibrium model with endogenous growth and money is examined. In this setting, inflation lowers growth through its effect on the return to work. However, the welfare costs of higher inflation are modest.
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Suggested Citation

  • Gomme, P., 1993. "Money and Growth Revisited : Measuring the Costs of Inflation in an Endogenous Growth Model," Discussion Papers dp93-03, Department of Economics, Simon Fraser University.
    • Handle: RePEc:sfu:sfudps:dp93-03
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    Keywords

    inflation ; economic growth;

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