A REVISION ON THE WELFARE COSTS OF INFLATION AND SEIGNIORAGE IN BRAZIL: A MODEL WITH LEISURE

Authors

  • Carlos Eduardo Gomes State University of Maringá
  • Maria Helena Ambrosio Dias State University of Maringá

DOI:

https://doi.org/10.31501/ealr.v12i2.10593

Abstract

This is a revised version of DIAS (1993) on the implications of inflation for the social-welfare of the Brazilian economy. The theoretical model is the same with improvements in its estimations. We have a new data set that was able to correct some measurement errors we found in the earlier version. The analysis here is concerned with the welfare loss overall society has due to high inflation rates. The main focus of analysis start with the measurement of seigniorage. What happens to seigniorage at high inflation rates, and why might governments be tempted to over-inflate? The model presents a utility function with leisure depending on real money balances and consumption. The theoretical propositions are useful to study economies with high inflation rates.

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Author Biography

Carlos Eduardo Gomes, State University of Maringá

Pós-Doutorando do Programa de Pós-Graduação em Ciências Econômicas da Universidade Estadual de Maringá.

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Published

2021-09-13

Issue

Vol. 12 No. 2 (2021): Economic Analysis of Law Review

Section

Papers

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