Inflation Taxation and Welfare with Externalities and Leisure

Ho, Wai-Ming; Zeng, Jinli; Zhang, Jie

doi:10.1111/j.0022-2879.2007.00005.x

Cited by 21 publications

(14 citation statements)

References 37 publications

(37 reference statements)

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“…12 See for example Ho et al (2007) for a discussion of this type of productive externality. Here we assume that the externality arises from the production of intermediate goods.…”

Section: Final Goodmentioning

confidence: 99%

“…When the in ‡ation rate increases from the benchmark value of 0.025 to 0.100, the increase in the coe¢cient of variation of income ranges from 0.4% (in the case of " = 0:43) to 0.7% (in the case of " = 0:55). 27 Therefore, larger productive externality ampli…es the e¤ect of in ‡ation on income inequality. When the in ‡ation rate is above 0.1, any further increase in in ‡ation is associated with a decline in income inequality.…”

Section: Calibration and Simulationmentioning

confidence: 99%

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Innovation and inequality in a monetary Schumpeterian model with heterogeneous households and firms

Chu

Cozzi

Fan

et al. 2019

Review of Economic Dynamics

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This study develops a Schumpeterian growth model with heterogeneous households and heterogeneous …rms to explore the e¤ects of monetary policy on innovation and income inequality. Household heterogeneity arises from an unequal distribution of wealth. Firm heterogeneity arises from random quality improvements and a cost of entry. We …nd that under endogenous …rm entry, in ‡ation has inverted-U e¤ects on economic growth and income inequality. We also calibrate the model for a quantitative analysis and …nd that the model is able to match the growth-maximizing in ‡ation rate and the inequalitymaximizing in ‡ation rate that we estimate using crosscountry panel data.

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“…12 See for example Ho et al (2007) for a discussion of this type of productive externality. Here we assume that the externality arises from the production of intermediate goods.…”

Section: Final Goodmentioning

confidence: 99%

Section: Calibration and Simulationmentioning

confidence: 99%

Innovation and inequality in a monetary Schumpeterian model with heterogeneous households and firms

Chu

Cozzi

Fan

et al. 2019

Review of Economic Dynamics

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“…For instance, Rankin and Roffia (2003) examine issues related to the existence of a maximum sustainable level of debt in a diamond-type model. Leith and Wren-Lewis (2000), and Ho et al (2007) study interactions between monetary and fiscal policy. Heijdra and Ligthart (2000) compare the macroeconomic effects of different tax regimes.…”

Section: Introductionmentioning

confidence: 99%

Global effects of national fiscal policy in a multi-country growth model with capital accumulation

Zhang

2012

IJBG

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The purpose of this study is to examine dynamic interactions of economic growth, trade patterns and fiscal policies among multiple countries. Basing on the two traditional models in neoclassical growth theory -Uzawa's two-sector growth model and the one-sector neoclassical trade model with capital, this paper proposes a multi-country growth model with public sector and capital accumulation. We show that the motion of the world economy with J-countries is described by a J-dimensional differential equations system. We identify the existence of equilibrium of the global economy and demonstrate effects of changes in some of the fiscal policies. We show that a change in the same policy parameter in the same direction in different economies may have opposite effects on the global economy and the domestic and foreign economies.

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“…As for monetary growth models with money in utility, see, for example, Wang and Yip () and Ho, Zeng, and Zhang ().…”

mentioning

confidence: 99%

A Tale of Two Growth Engines: Interactive Effects of Monetary Policy and Intellectual Property Rights

Chu¹,

Lai²,

Liao³

2018

J of Money Credit Banking

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How do intellectual property rights that determine the market power of firms influence the growth and welfare effects of monetary policy? To analyze this question, we develop a monetary hybrid endogenous growth model in which R&D and capital accumulation are both engines of long‐run economic growth. We find that monetary expansion hurts economic growth and social welfare by reducing R&D and capital accumulation. Furthermore, a larger market power of firms strengthens these growth and welfare effects of monetary policy through the R&D channel but weakens these effects through the capital‐accumulation channel. Therefore, whether the market power of firms amplifies or mitigates the welfare cost of inflation depends on the relative importance of the two growth engines. Finally, we calibrate the model using data in the United States and the Euro Area to quantitatively evaluate and compare the welfare cost of inflation in these two economies and find that the R&D channel dominates in both economies.

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Inflation Taxation and Welfare with Externalities and Leisure

Cited by 21 publications

References 37 publications

Innovation and inequality in a monetary Schumpeterian model with heterogeneous households and firms

Innovation and inequality in a monetary Schumpeterian model with heterogeneous households and firms

Global effects of national fiscal policy in a multi-country growth model with capital accumulation

A Tale of Two Growth Engines: Interactive Effects of Monetary Policy and Intellectual Property Rights

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