鲁迪格·多恩布什-宏观经济学（第十三版）IPPTChap008.pptVIP

InflationChapter #8Copyright ? 2014 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. IntroductionCosts of extremely high inflation easy to seeIf prices rise rapidly enough, money stops being a useful medium of exchangeCosts of low, expected inflation are difficult to seeRegardless, public has a distaste for it ? becomes a policy issueUnexpected inflation has distributional cost (debtors vs. creditors)8-2 The Costs of InflationPerfectly anticipated inflation: Suppose an economy has been experiencing inflation of 5% and the anticipated rate of inflation is also 5%, then all contracts will build in the expected 5% inflationNominal interest rates account for the inflationLong term labor contracts account for the inflationTax brackets are typically adjusted to account for the inflation? Inflation has no real costs, except for two qualifications:The costs of holding currency rise along with the rate of inflation, and the demand for currency decreasesMenu costs of inflation8-3 The Costs of InflationImperfectly anticipated inflation: full adjustment to inflation does not describe economies in the real world ? imperfectly anticipatedMost contracts are written in nominal termsIf inflation is unexpectedly high, debtors repay loans in cheaper dollarsIf inflation in unexpectedly low, debtors repay loans in more valuable dollars (take a loss)The possibility of unexpected inflation introduces an element of risk, which might prevent some from making some exchanges they otherwise would undertakeUnanticipated inflation redistributes wealth and income8-4 The Costs of InflationRedistribution effect operates with respect to all assets fixed in nominal termsMoney, bonds, savings accounts, insurance contracts, some pensionsRealized real interest rates are lower than nominal interest rates if inflation 8-5 Inflation and IndexationIn counties where inflation rates are high and uncertain, long-term borrowi