B. Many lump together the impact of inflation and inflation volatility. These two should be analyzed separately. Redistributive impact of inflation 2. DW costs of inflation 3. Redistributive impact of inflation volatility 4.
Government gets more inflation tax revenue.
The tax on real cash balances. Interaction between inflation and other tax distortions. Harm of inflation to productivity growth. Greater difficulty of long-term contracting. Expectational errors get more severe - could lead to larger deviations from natural unemployment rate.