A unified framework for monetary theory and policy analysis
By: Ricardo Lagos and Randall Wright.
Contributors: Wright, Randall.
Series: Federal Reserve Bank of Minneapolis, Research Department staff report ;; 346; Staff report (Federal Reserve Bank of Minneapolis. Research Dept. : Online) ;; 346.
Publisher: Federal Reserve Bank of Minneapolis
Published: 2004
Place of publication: [Minneapolis, Minn.]
Language: eng
Format: Electronic resource
Subjects: Monetary policy
Description: "Search-theoretic models of monetary exchange are based on explicit descriptions of the frictions that make money essential.  However, tractable versions of these models typically need strong assumptions that make them ill-suited for studying monetary policy.  We propose a framework based on explicit micro foundations within which macro policy can be analyzed.  The model is both analytically tractable and amenable to quantitative analysis.  We demonstrate this by using it to estimate the welfare cost of inflation.  We find much higher costs than the previous literature: our model predicts that going from 10% to 0% inflation can be worth between 3% and 5% of consumption"--Federal Reserve Bank of Minneapolis web site.
Notes: Also available in print.
Includes bibliographical references.
Title from PDF file as viewed on 11/10/2004.
System requirements: Adobe Acrobat Reader.
Mode of access: World Wide Web.