FEEM working papers "Note di lavoro" series
2001 .012

Inflation and Welfare in an OLG Economy with a Privately Provided Public Good

Authors: Sergio Currarini, Gaetano Bloise, Nicholas Kikidis
Series: Economy and Society
Type: Journal
Keywords: Optimal inflation,public goods,voluntary contributions
JEL n.: H41,E52,D91
JEL: Journal of Public Economic Theory
Pages: 4(3)
Date: 2002


In this paper we study the welfare effects of monetary policy in a simple overlapping generation economy in which agents voluntarily contribute to a public good. Inflation has two effects at equilibrium: it increases voluntary contributions and it misallocates private consumption across time. We show that the aggregate effect is welfare-improving for "not too large" inflation rates. Moreover, there exists an optimal inflation rate.

Download file
Download PDF file

FEEM Newsletter & Update

Subscribe to stay connected.

Your personal data will be processed by Fondazione Eni Enrico Mattei. – data Controller – with the aim of emailing the FEEM newsletter & Update. The use of Your email address is necessary for the implementation of the newsletter service. You are invited to read the Privacy Policy in order to obtain additional information about the protection of Your rights.

This Website uses technical cookies and cookie analytics, as well as “third party” profiling cookies.
If you close this banner or you decide to continue navigating on this Website, you express consent to the use of cookies. If you need additional information or you wish to express selective choices on the use of cookies, please refer to the   Cookie PolicyI agree