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
Price stability target; saving elasticity 1.0 (high interest elasticity), deadweight loss parameter 0.4