Arbeitspapier
Welfare costs of inflation and the circulation of US currency abroad
Empirical studies of the "shoe-leather" costs of inflation are typically computed using M1 as a measure of money. Yet, official data on M1 includes all currency issued, regardless of the country of residence of the holder. Using monetary data adjusted for US dollars abroad, we show that the failure to control for currency held by non residents may lead to significantly overestimating the shoe-leather costs for the domestic economy. In particular, our estimates of shoe-leather costs are minimized for a positive but moderate value of the inflation rate, thereby justifying a deviation from the Friedman rule in favour of the Fed's current policy.
- Sprache
-
Englisch
- Erschienen in
-
Series: ECB Working Paper ; No. 1326
- Klassifikation
-
Wirtschaft
Price Level; Inflation; Deflation
Demand for Money
Monetary Policy
- Thema
-
flow of funds data
US currency abroad
Welfare costs of inflation
- Ereignis
-
Geistige Schöpfung
- (wer)
-
Calza, Alessandro
Zaghini, Andrea
- Ereignis
-
Veröffentlichung
- (wer)
-
European Central Bank (ECB)
- (wo)
-
Frankfurt a. M.
- (wann)
-
2011
- Handle
- Letzte Aktualisierung
- 10.03.2025, 11:45 MEZ
Datenpartner
Dieses Objekt wird bereitgestellt von:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.
Objekttyp
- Arbeitspapier
Beteiligte
- Calza, Alessandro
- Zaghini, Andrea
- European Central Bank (ECB)
Entstanden
- 2011
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