Year: 1999
Type: article
Abstract: We determine the second best rule for the inflation tax in monetary general equilibrium models where money is dominated in rate of return.The results in the literature are ambiguous and inconsistent across different monetary environments.We compare the derived optimal inflation tax solutions across the different environments and find that Friedman's policy recommendation of a zero nominal interest rate is the right one.
Source: Review of Economic Dynamics
Authors: Isabel Correia, Pedro Teles
Institutions: Universidade Católica Portuguesa, Banco de Portugal
Language: English
Topic: Economic theories and models
Subfield: Economics and Econometrics
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W2005046549