Silva, André C.2017-11-202017-11-202012-01-011945-7707PURE: 334974PURE UUID: bfe20ba5-7649-4760-80b1-6bc7f5f28131researchoutputwizard: 37967WOS: 000302552800006Scopus: 84864990566ORCID: /0000-0002-4907-038X/work/77409909http://hdl.handle.net/10362/25566WOS:000302552800006Cash-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 10 percent instead of 0 inflation increases from 0.1 percent of income with fixed periods to 1 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.1005103engTransactions demandInterest-ratesMoney demandjournal article10.1257/mac.4.2.153