IDEAS home Printed from https://ideas.repec.org/p/fgv/epgewp/431.html
   My bibliography  Save this paper

Inflation, welfare and public expenditures

Author

Listed:
  • Ferreira, Pedro Cavalcanti

Abstract

This paper studies welfare effects of monetary policy in an overlapping generations model with capital and no form of taxation other than inflation. Public expenditures have a positive effect on labor productivity. The main result of the paper is that an expansive monetary policy can be welfare improving, at least for ìsmall enoughî inflation rates, and that there is an optimal inflation rate. Growth maximization, however, is never optimal. Steady-state capital and output increase with inflation, reproducing the so-called Tobin effect. For large inflation rates, however, the government authorities cannot affect real variables and there are only nominal effects.

Suggested Citation

  • Ferreira, Pedro Cavalcanti, 2001. "Inflation, welfare and public expenditures," FGV EPGE Economics Working Papers (Ensaios Economicos da EPGE) 431, EPGE Brazilian School of Economics and Finance - FGV EPGE (Brazil).
    • Handle: RePEc:fgv:epgewp:431
    as

    Download full text from publisher

    File URL: https://repositorio.fgv.br/bitstreams/f7e49ef1-0f36-41d4-a135-27acac5dafbc/download
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Boldrin, Michele, 2005. "Public education and capital accumulation," Research in Economics, Elsevier, vol. 59(2), pages 85-109, June.
    2. Weiss, Laurence M, 1980. "The Effects of Money Supply on Economic Welfare in the Steady State," Econometrica, Econometric Society, vol. 48(3), pages 565-576, April.
    3. Barro, Robert J, 1990. "Government Spending in a Simple Model of Endogenous Growth," Journal of Political Economy, University of Chicago Press, vol. 98(5), pages 103-126, October.
    4. Glomm, Gerhard & Ravikumar, B, 1992. "Public versus Private Investment in Human Capital Endogenous Growth and Income Inequality," Journal of Political Economy, University of Chicago Press, vol. 100(4), pages 818-834, August.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Ferreira, Pedro Cavalcanti, 1998. "Inflationary financing of public investment and economic growth," FGV EPGE Economics Working Papers (Ensaios Economicos da EPGE) 322, EPGE Brazilian School of Economics and Finance - FGV EPGE (Brazil).
    2. Osang, Thomas & Sarkar, Jayanta, 2008. "Endogenous mortality, human capital and economic growth," Journal of Macroeconomics, Elsevier, vol. 30(4), pages 1423-1445, December.
    3. Osang, Thomas & Sarkar, Jayanta, 2005. "Endogenous Mortality, Human Capital and Endogenous Growth," Departmental Working Papers 0511, Southern Methodist University, Department of Economics.
    4. Cavalcanti Ferreira, Pedro, 1999. "Inflationary financing of public investment and economic growth," Journal of Economic Dynamics and Control, Elsevier, vol. 23(4), pages 539-563, February.
    5. Glomm, Gerhard & Ravikumar, B., 1997. "Productive government expenditures and long-run growth," Journal of Economic Dynamics and Control, Elsevier, vol. 21(1), pages 183-204, January.
    6. Arcalean, Calin & Glomm, Gerhard & Schiopu, Ioana, 2012. "Growth effects of spatial redistribution policies," Journal of Economic Dynamics and Control, Elsevier, vol. 36(7), pages 988-1008.
    7. Gonzalez-Eiras, Martín & Niepelt, Dirk, 2012. "Ageing, government budgets, retirement, and growth," European Economic Review, Elsevier, vol. 56(1), pages 97-115.
    8. Dimitrios Varvarigos, 2020. "Cultural Transmission, Education-Promoting Attitudes, and Economic Development," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 37, pages 173-194, July.
    9. Saint-Paul, Gilles, 1997. "The role of rents to human capital in economic development," Journal of Development Economics, Elsevier, vol. 53(2), pages 229-249, August.
    10. Tetsuo Ono, 2015. "Public education and social security: a political economy approach," Economics of Governance, Springer, vol. 16(1), pages 1-25, February.
    11. Mausumi Das & Subrata Guha, 2012. "What Do Teachers Do? Teacher Quality Vis-a-vis Teacher Quantity in a Model of Public Education and Growth," Working papers 216, Centre for Development Economics, Delhi School of Economics.
    12. Giorgio Bellettini & Carlotta Berti Ceroni, 1999. "Is Social Security Really Bad for Growth?," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 2(4), pages 796-819, October.
    13. Lars Kunze, 2009. "Capital Taxation, Long-run Growth, and Bequests," Ruhr Economic Papers 0113, Rheinisch-Westfälisches Institut für Wirtschaftsforschung, Ruhr-Universität Bochum, Universität Dortmund, Universität Duisburg-Essen.
    14. Yasuoka, Masaya & Oguro, Kazumasa, 2015. "Public Education, Pension and Debt Policy," CIS Discussion paper series 649, Center for Intergenerational Studies, Institute of Economic Research, Hitotsubashi University.
    15. Mr. Hyun Park, 2006. "Expenditure Composition and Distortionary Tax for Equitable Economic Growth," IMF Working Papers 2006/165, International Monetary Fund.
    16. Naito, Katsuyuki, 2012. "Two-sided intergenerational transfer policy and economic development: A politico-economic approach," Journal of Economic Dynamics and Control, Elsevier, vol. 36(9), pages 1340-1348.
    17. Silvia Bertarelli, 2006. "Public capital and growth," Politica economica, Società editrice il Mulino, issue 3, pages 361-398.
    18. Park, Hyun & Philippopoulos, Apostolis, 2003. "On the dynamics of growth and fiscal policy with redistributive transfers," Journal of Public Economics, Elsevier, vol. 87(3-4), pages 515-538, March.
    19. Glomm, Gerhard & Kaganovich, Michael, 2008. "Social security, public education and the growth-inequality relationship," European Economic Review, Elsevier, vol. 52(6), pages 1009-1034, August.
    20. Diego Aboal, 2020. "Electoral systems and economic growth," Economia Politica: Journal of Analytical and Institutional Economics, Springer;Fondazione Edison, vol. 37(3), pages 781-805, October.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:fgv:epgewp:431. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Núcleo de Computação da FGV EPGE (email available below). General contact details of provider: https://edirc.repec.org/data/epgvfbr.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.