Welfare cost of inflation, Inflation tax, Inflation, E52
Abstract
This paper measures the welfare cost of inflation for the case of Greece, using
quarterly data for the period 1980Q1-1999Q4. Log-log and semi-log money demand
functions are estimated using both OLS and Stock and Watson’s (1993) dynamic
OLS method. These estimates show the welfare cost of a 10 percent inflation rate
in the range of 0.59 percent to 0.91 percent of GDP.
