This paper studies an economy with ex post heterogeneity and nominal bonds in a model a la Lagos and Wright (2005). It is shown that a strictly positive interest rate is a sufficient condition for the allocation with nominal bonds to be welfare-improving. This result comes from protection against the inflation tax.
Money and Nominal Bonds
SENESI, Pietro;
2009-01-01
Abstract
This paper studies an economy with ex post heterogeneity and nominal bonds in a model a la Lagos and Wright (2005). It is shown that a strictly positive interest rate is a sufficient condition for the allocation with nominal bonds to be welfare-improving. This result comes from protection against the inflation tax.File in questo prodotto:
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