优通货膨胀率宏观济学5e ch5e.pptx

2of3425-1TheOptimalInflationRateInflationhassteadilygonedowninrichcountriessincetheearly1980s.Theattempttoreduceitevenfurtherdependsonthecostsandbenefitsofinflation.Table25-1InflationRatesinOECDCountriessince1981Year198119851990199520002006OECDaverage*10.5%6.6%6.2%5.2%2.8%2.2%Numberofcountrieswith

inflationbelow5%?21015212425*AverageofGDPdeflatorinflationrates,usingrelativeGDPsmeasuredatPPPpricesasweights.

3of34MonetaryPolicy:WhatYouHave

LearnedandWhereAquickreviewofChapters4through24andanoverviewoftheinformationpresentedinChapter25.

4of34We’veseenhowveryhighinflationcandisrupteconomicactivity.ThedebateinOECDcountriestoday,however,centersontheadvantagesof,say,0%versus3%inflationayear.Withinthatrange,economistsidentifyfourmaincostsofinflation:shoe-leathercosts,taxdistortions,moneyillusion,andinflationvariability.25-1TheOptimalInflationRateTheCostsofInflation

5of34Taxdistortionsoccurwhentaxratesdonotincreaseautomaticallywithinflation,aconceptknownasbracketcreep.eforpurposesoftaxationincludesnominalinterestpayments,notrealinterestpayments.25-1TheOptimalInflationRateTheCostsofInflationTaxDistortionsShoe-leatherCostsShoe-leathercostsarethecostsofmakingmoretripstothebankinthepresenceofinflation.Theyreflectanincreaseintheopportunitycostofholdingmoney.

6of3425-1TheOptimalInflationRateTheCostsofInflationMoneyillusionisthecostofinflationassociatedwiththenotionthatpeoplemakesystematicmistakesinassessingnominalversusrealchanges,leadingpeopletomakeincorrectdecisions.MoneyIllusionInflationvariabilitymeansthatfinancialassetssuchasbonds,whichpromisefixednominalpaymentsinthefuture,eriskier.InflationVariability

7of34MoneyIllusionThereisalotofanecdotalevidencethatmanypeoplefailtoadjustproper