The Costs and Benefits of Going from Low Inflation to Price Stability
Harvard University; National Bureau of Economic Research
Two-period overlapping generations model with capital income taxation, housing sector, money demand (MIU), and government budget constraint integrating monetary and fiscal policy. Analyzes welfare costs of inflation through tax-inflation intera
Cobb-Douglas production function with constant returns to scale; competitive factor markets
Table 3.1 p.128
Low inflation baseline (measured inflation 4%, true inflation 2%); comparison point for welfare analysis