TY - JOUR
T1 - Inflation and efficiency in a search economy
AU - Fershtman, Chaim
AU - Fishman, Arthur
AU - Simhon, Avi
PY - 2003/2
Y1 - 2003/2
N2 - We present a model in which purely monetary inflation systematically affects efficiency, welfare, and relative prices. The model focuses on the microeconomics of trade in search markets under inflation. Inflation, by increasing the cost of holding money, undermines the market's ability to sustain long-term customer relationships. Because those relationships generate the most efficient transactions patterns, overall welfare unambiguously declines.
AB - We present a model in which purely monetary inflation systematically affects efficiency, welfare, and relative prices. The model focuses on the microeconomics of trade in search markets under inflation. Inflation, by increasing the cost of holding money, undermines the market's ability to sustain long-term customer relationships. Because those relationships generate the most efficient transactions patterns, overall welfare unambiguously declines.
UR - http://www.scopus.com/inward/record.url?scp=0037297010&partnerID=8YFLogxK
U2 - 10.1111/1468-2354.t01-1-00067
DO - 10.1111/1468-2354.t01-1-00067
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AN - SCOPUS:0037297010
SN - 0020-6598
VL - 44
SP - 205
EP - 222
JO - International Economic Review
JF - International Economic Review
IS - 1
ER -