Utilize este identificador para referenciar este registo: http://hdl.handle.net/10362/12341
Título: Rebalancing frequency and the welfare cost of inflation
Autor: Silva, André C.
Palavras-chave: portfolio rebalancing frequency
welfare cost of inflation
money demand
cash-in-advance models
market segmentation
Data: Jul-2014
Editora: NSBE
Relatório da Série N.º: FEUNL Working Paper;587
Resumo: Cash-in-advance models usually require agents to reallocate money and bonds in fixed periods, every month or quarter, for example. I show that fixed periods underestimate the welfare cost of inflation. I use a model in which agents choose how often they exchange bonds for money. In the benchmark specification, the welfare cost of ten percent instead of zero inflation increases from 0.1 percent of income with fixed periods to one percent with optimal periods. The results are robust to different preferences, to different compositions of income in bonds or money, and to the introduction of capital and labor.
URI: http://hdl.handle.net/10362/12341
Versão do Editor: http://dx.doi.org/10.1257/mac.4.2.153
Aparece nas colecções:NSBE: Nova SBE - Working Papers

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