Campus Units

Economics

Document Type

Article

Publication Version

Submitted Manuscript

Publication Date

10-2001

Journal or Book Title

Review of Economic Dynamics

Volume

4

Issue

4

First Page or Article ID Number

823

Last Page

841

DOI

10.1006/redy.2001.0135

Abstract

Using a pure-exchange overlapping generations model in which money is valued because of a legal restriction, we show the following: a) a benevolent government may make some use of the inflation tax in conjunction with a lump-sum tax on the young but not if lump-sum taxes on the old are available, and b) the welfare-maximizing monetary policy may deviate from the Friedman rule (contract the money supply so as to equate the real return on money and other competing stores of value) in either case.

JEL Classification

E58, E63, H21

Comments

This is a manuscript of an article published as Bhattacharya, Joydeep, and Joseph H. Haslag. "On the use of the inflation tax when nondistortionary taxes are available." Review of Economic Dynamics 4, no. 4 (2001): 823-841. doi:10.1006/redy.2001.0135. Posted with permission.

Copyright Owner

Academic Press

Language

en

File Format

application/pdf

Published Version

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