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.
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Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/11574/29571
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