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The optimal inflation tax Author info | Abstract | Publisher info | Download info | Related research | Statistics Isabel Correia
Pedro Teles
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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.
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Paper provided by Federal Reserve Bank of Minneapolis in its series Discussion Paper / Institute for Empirical Macroeconomics with number
123.
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Date of creation: 1997Date of revision:
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Keywords: Inflation (Finance) Taxation Other versions of this item:
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