Abstract
The welfare effects of mitigating the costs of inflation are examined. In a model where money reduces transactions costs, a fall in inflation costs is equivalent to financial innovation. This can be caused by paying interest on deposits, indexing money, or “dollarizing.” Results indicate that financial innovation raises welfare in low-inflation economies while reducing it in high-inflation economies because of the offsetting indirect effect of higher inflation to finance the budget.
Volume 38 (1991) comprises four issues, as follows:
March, pages 1–234
June, pages 235–446
September, pages 447–674
December, pages 675–941
Authors
Adams, Charles, and Bankim Chadha, Structural Models of the Dollar 525
Adams, Charles, and Bankim Chadha. On Interpreting the Random Walk and Unit Root in Nominal and Real Exchange Rates 901
Andersson, Krister. Taxation and the Com ut Capital in Hungary and Poland: A Comparison with Selected European Countries. 327
Axilrod. Stephen H. Issues in Interest Rate Management and Liberalization: Comment on Leite and Sundararajan 229
Barnett. Richard R and Peter Smith. The 1990 Reform of U.K. Local Authority Finance—An Alternative Analysis: Comment on Bayoumi. 666
Bartolini, Leonardo, and Avinash Dixit. Market Valuation of Illiquid Debt and Implications for Conflicts Among Creditors. 828
Bayoumi, Tamim. The 1990 Reform of U.K. Local Authority Finance 216
Bayoumi. Tamim. The 1990 Reform of U.K. Local Authority Finance — An Alternative Analysis—Reply to Barnett and Smith., 671
Bomhoff, Eduard J. Stability of Velocity in the Major Industrial Countries: A Kalman Filter Approach 626
Borensztcin, Eduardo, and Manmohan S. Kumar. Proposals for Privatization in Eastern Europe 300
Boughton, James M. Long-Run Money Demand in Large Industrial Countries.1
Bovenberg, A. Lans, Jeroen J.M. Kremers, and Paul R. Masson. Economic and Monetary Union in Europe and Constraints on National Budgetary Policies,. 374
Calvo. Guillermo A,, and Jacob A. Frenkel. From Centrally Planned to Market Economy: The Road from CPE to PCPE 268
Calvo, Guillermo A. The Perils of Sterilization 921
Chadha. Bankim. Wages, Profitability, and Growth in a Small Open Economy 59
Chadha, Bankim, and Charles Adams. Structural Models of the Dollar 525
Chadha, Bankim, and Charles Adams. On Interpreting the Random Walk and Unit Root in Nominal and Real Exchange Rates 901
De Gregorio, José. Welfare Costs of Inflation, Seigniorage, and Financial Innovation 675
Dixit, Avinash. The Optimal Mix of Inflationary Finance and Commodity Taxation with Collection Lags 643
Dixit, Avinash, and Leonardo Bartolini. Market Valuation of Illiquid Debt and Implications for Conflicts Among Creditors 828
Ebrill, Liam P., and Steven M. Fries. Broad Money Growth and Inflation in the United States 736
Frenkel, Jacob A., and Guillermo A. Calvo, From Centrally Planned to Market Economy: The Road from CPE to PCPE 268
Frenkel, Jacob A., and Morris Goldstein. Monetary Policy in an Emerging European Economic and Monetary Union: Key Issues 356
Frenkel, Jacob A., Assaf Razin, and Steven Symansky. International VAT Harmonization: Macroeconomic Effects 789
Fries, Steven M., and Liam P. Ebrill. Broad Money Growth and Inflation in the United States 736
Goldstein, Morris, and Jacob A. Frenkel. Monetary Policy in an Emerging European Economic and Monetary Union: Key Issues 356
Greene, Joshua, and Delano Villanueva. Private Investment in Developing Countries: An Empirical Analysis 33
Kenen, Peter B. Transitional Arrangements for Trade and Payments Among the CMEA Countries 235
Khor, Hoe E,, and Liliana Rojas-Suarez. Interest Rates in Mexico: The Role of Exchange Rate Expectations and International Credit-worthiness 850
Kremers, Jeroen J.M., A, Lans Bovenberg, and Paul R. Masson. Economic and Monetary Union in Europe and Constraints on National Budgetary Policies 374
Kumar, Manmohan S., and Eduardo Borensztein. Proposals for Privatization in Eastern Europe 300
Lahiri, Ashok Kumar. Money and Inflation in Yugoslavia 751
Lizondo, J. Saúl. Alternative Dual Exchange Market Regimes: Some Steady-State Comparisons 560
Masson, Paul R., A. Lans Bovenberg, and Jeroen J.M. Kremers. Economic and Monetary Union in Europe and Constraints on National Budgetary Policies 374
Mendoza, Enrique G. Capital Controls and the Gains from Trade in a Business Cycle Model of a Small Open Economy 480
Miller, Marcus, and Paul Weller. Currency Bands, Target Zones, and Price Flexibility 184
Montiel, Peter J. The Transmission Mechanism for Monetary Policy in Developing Countries 83
Montiel, Peter J., and Jonathan D. Ostry. Macroeconomic Implications of Real Exchange Rate Targeting in Developing Countries 872
Ostry, Jonathan D. Trade Liberalization in Developing Countries: Initial Trade Distortions and Imported Intermediate Inputs 447
Ostry, Jonathan D., and Peter J. Montiel. Macroeconomic Implications of Real Exchange Rate Targeting in Developing Countries 872
Perraudin, W, R. M., and T. Pujol. European Fiscal Harmonization and the French Economy 399
Pujol, T., and W.R.M. Perraudin, European Fiscal Harmonization and the French Economy 399
Razin, Assaf, Jacob A. Frenkel, and Steven Symansky. International VAT Harmonization: Macroeconomic Effects 789
Reinhart, Carmen M. Fiscal Policy, the Real Exchange Rate, and Commodity Prices 506
Reinhart, Carmen M., and Vincent R. Reinhart. Output Fluctuations and Monetary Shocks: Evidence from Colombia 705
Reinhart, Vincent R., and Carmen M. Reinhart. Output Fluctuations and Monetary Shocks: Evidence from Colombia 705
Rojas-Suarez, Liliana, and Hoe E. Khor. Interest Rates in Mexico: The Role of Exchange Rate Expectations and International Creditworthiness 850
Sadka, Efraim. An Inflation-Proof Tax System? Some Lessons from Israel 135
Scott, Louis O. Financial Market Volatility: A Survey 582
Smith, Peter, and Richard R. Barnett. The 1990 Reform of U.K. Local Authority Finance—An Alternative Analysis: Comment on Bayoumi 666
Svensson, Lars E.O. The Simplest Test of Target Zone Credibility 655
Symansky, Steven, Jacob A. Frenkel, and Assaf Razin. International VAT Harmonization: Macroeconomic Effects 789
Takagi, Shinji. Exchange Rate Expectations: A Survey of Survey Studies 156
Towe, Christopher M. The Budgetary Control and Fiscal Impact of Government Contingent Liabilities 109
Villanueva, Delano, and Joshua Greene. Private Investment in Developing Countries: An Empirical Analysis 33
Weller, Paul, and Marcus Miller. Currency Bands, Target Zones, and Price Flexibility 184
Titles
Alternative Dual Exchange Market Regimes: Some Steady-State Comparisons. By J. Saúl Lizondo 560
Broad Money Growth and Inflation in the United States. By Liam P. Ebrill and Steven M. Fries 736
The Budgetary Control and Fiscal Impact of Government Contingent Liabilities. By Christopher M. Towe 109
Capital Controls and the Gains from Trade in a Business Cycle Model of a Small Open Economy. By Enrique G. Mendoza 480
Currency Bands, Target Zones, and Price Flexibility. By Marcus Miller and Paul Weller 184
Economic and Monetary Union in Europe and Constraints on National Budgetary Policies. By A. Lans Bovenberg, Jeroen J.M. Kremers, and Paul R. Masson 374
European Fiscal Harmonization and the French Economy. By W.R.M. Perraudin and T. Pujol 399
Exchange Rate Expectations: A Survey of Survey Studies. By Shinji Takagi 156
Financial Market Volatility: A Survey. By Louis O. Scott 582
Fiscal Policy, the Real Exchange Rate, and Commodity Prices. By Carmen M. Reinhart 506
From Centrally Planned to Market Economy: The Road from CPE to PCPE. By Guillermo A. Calvo and Jacob A. Frenkel 268
An Inflation-Proof Tax System? Some Lessons from Israel. By Efraim Sadka 135
Interest Rates in Mexico: The Role of Exchange Rate Expectations and International Creditworthiness. By Hoe E. Khor and Liliana Rojas-Suarez 850
International VAT Harmonization: Macroeconomic Effects. By Jacob A. Frenkel, Assaf Razin, and Steven Symansky 789
Issues in Interest Rate Management and Liberalization: Comment on Leite and Sundararajan. By Stephen H. Axilrod 229
Long-Run Money Demand in Large Industrial Countries. By James M. Boughton 1
Macroeconomic Implications of Real Exchange Rate Targeting in Developing Countries. By Peter J. Montiel and Jonathan D. Ostry 872
Market Valuation of Illiquid Debt and Implications for Conflicts Among Creditors. By Leonardo Bartolini and Avinash Dixit 828
Monetary Policy in an Emerging European Economic and Monetary Union: Key Issues. By Jacob A. Frenkel and Morris Goldstein 356
Money and Inflation in Yugoslavia. By Ashok Kumar Lahiri 751
The 1990 Reform of U.K. Local Authority Finance. By Tamim Bayoumi 216
The 1990 Reform of U.K. Local Authority Finance—An Alternative Analysis: Comment on Bayoumi. By Richard R., Barnett and Peter Smith 666
The 1990 Reform of U.K. Local Authority Finance—An Alternative Analysis: Reply to Barnett and Smith. By Tamim Bayoumi 671
On Interpreting the Random Walk and Unit Root in Nominal and Real Exchange Rates. By Charles Adams and Bankim Chadha 901
The Optimal Mix of Inflationary Finance and Commodity Taxation with Collection Lags. By Avinash Dixit 643
Output Fluctuations and Monetary Shocks: Evidence from Colombia. By Carmen M. Reinhart and Vincent R. Reinhart 705
The Perils of Sterilization. By Guillermo A. Calvo 921
Private Investment in Developing Countries: An Empirical Analysis. By Joshua Greene and Delano Villanueva 33
Proposals for Privatization in Eastern Europe. By Eduardo Borensztein and Manmohan S. Kumar 300
The Simplest Test of Target Zone Credibility. By Lars E.O. Svensson 655
Stability of Velocity in the Major Industrial Countries: A Kalman Filter Approach. By Eduard J. Bomhoff 626
Structural Models of the Dollar. By Charles Adams and Bankim Chadha 525
Taxation and the Cost of Capital in Hungary and Poland: A Comparison with Selected European Countries. By Krister Andersson 327
Trade Liberalization in Developing Countries: Initial Trade Distortions and Imported Intermediate Inputs. By Jonathan D. Ostry 447
Transitional Arrangements for Trade and Payments Among the CMEA Countries. By Peter B. Kenen 235
The Transmission Mechanism for Monetary Policy in Developing Countries. By Peter J. Montiel 83
Wages, Profitability, and Growth in a Small Open Economy. By Bankim Chadha 59
Welfare Costs of Inflation, Seigniorage, and Financial Innovation. By José De Gregorio 675
Subjects
To facilitate electronic storage and retrieval of bibliographic data, Staff Papers has adopted, beginning with Number 2 (June) of Volume 38, the new subject classification scheme of the Journal of Economic Literature (Nashville, Tennessee). Articles appearing in Number 1 (March) of Volume 38 are listed under the old classification scheme.
NUMBER 1 (MARCH)
023 Macroeconomic Theory
Private Investment in Developing Countries: An Empirical Analysis. By Joshua Greene and Delano Villanueva 33
110 Economic Growth; Development; Planning Theory and Policy
Wages, Profitability, and Growth in a Small Open Economy. By Bankim Chadha 59
121 Economic Studies of Developing Countries
Private Investment in Developing Countries: An Empirical Analysis. By Joshua Greene and Delano Villanueva 33
Wages, Profitability, and Growth in a Small Open Economy. By Bankim Chadha 59
The Transmission Mechanism for Monetary Policy in Developing Countries. By Peter J. Montiel 83
130 Economic Fluctuations; Forecasting; Stabilization; Inflation
An Inflation-Proof Tax System? Some Lessons from Israel. By Efraim Sadka 135
211 Econometric and Statistical Methods and Models
Long-Run Money Demand in Large Industrial Countries. By James M. Boughton 1
221 National Income Accounting
Private Investment in Developing Countries: An Empirical Analysis. By Joshua Greene and Delano Villanueva 33
311 Domestic Monetary and Financial Theory and Policy
Long-Run Money Demand in Large Industrial Countries. By James M. Boughton 1
The Transmission Mechanism for Monetary Policy in Developing Countries. By Peter J. Montiel 83
320 Fiscal Theory and Policy
The Budgetary Control and Fiscal Impact of Government Contingent Liabilities. By Christopher M. Towe 109
An Inflation-Proof Tax System? Some Lessons from Israel. By Efraim Sadka 135
324 State and Local Government Finance
The 1990 Reform of U.K. Local Authority Finance. By Tamim Bayoumi 216
325 Intergovernmental Financial Relationships
The 199-Reform of U.K. Local Authority Finance. By Tamim Bayoumi 216
410 International Trade Theory
Wages, Profitability, and Growth in a Small Open Economy. By Bankim Chadha 59
431 Open Economy Macroeconomics; Exchange Rates
Long-Run Money Demand in Large Industrial Countries. By James M. Boughton 1
Exchange Rate Expectations: A Survey of Survey Studies. By Shinji Takagi 156
Currency Bands, Target Zones, and Price Flexibility. By Marcus Miller and Paul Weller 184
432 International Monetary Arrangements
Currency Bands, Target Zones, and Price Flexibility, By Marcus Miller and Paul Weller 184
NUMBERS 2, 3, and 4 (JUNE, SEPTEMBER, and DECEMBER)
C Mathematical and Quantitative Methods
C12 Hypothesis Testing Interest Rates in Mexico: The Role of Exchange Rate Expectations and International Creditworthiness. By Hoe E. Khor and Liliana Rojas-Suarez 850
C5 Econometric Modeling On Interpreting the Random Walk and Unit Root in Nominal and Real Exchange Rates. By Charles Adams and Bankim Chadha 901
D Microeconomics
D58 Computable and Other Applied General Equilibrium Models European Fiscal Harmonization and the French Economy. By W.R.M. Perraudin and T. Pujol 399
E Macroeconomics and Monetary Economics
E2 Consumption, Saving, Production, Employment, and Investment International VAT Harmonization: Macroeconomic Effects. By Jacob A. Frenkel, Assaf Razin, and Steven Symansky 789
E3 Prices, Business Fluctuations, and Cycles Output Fluctuations and Monetary Shocks: Evidence from Colombia. By Carmen M. Reinhart and Vincent R. Reinhart 705
E31 Price Level; Inflation; Deflation Broad Money Growth and Inflation in the United States. By Liam P. Ebrill and Steven M. Fries 736
Money and Inflation in Yugoslavia. By Ashok Kumar Lahiri 751
E32 Business Fluctuations; Cycles Capital Controls and the Gains from Trade in a Business Cycle Model of a Small Open Economy. By Enrique G. Mendoza 480
E37 Forecasting and Simulation Broad Money Growth and Inflation in the United States, By Liam P. Ebrill and Steven M. Fries 736
E41 Demand for Money Stability of Velocity in the Major Industrial Countries: A Kalman Filter Approach. By Eduard J. Bomhoff 626
Money and Inflation in Yugoslavia. By Ashok Kumar Lahiri 751
E44 Financial Markets and the Macroeconomy Financial Market Volatility: A Survey. By Louis O. Scott 582
E50 Welfare Costs of Inflation, Seigniorage, and Financial Innovation. By José De Gregorio 675
E51 Money Supply; Credit; Money Multipliers The Optimal Mix of Inflationary Finance and Commodity Taxation with Collection Lags. By Avinash Dixit 643
E52 Monetary Policy (Targets, Instruments, and Effects) Stability of Velocity in the Major Industrial Countries: A Kalman Filter Approach. By Eduard J. Bomhoff 626
Broad Money Growth and Inflation in the United States. By Liam P. Ebrill and Steven M. Fries 736
E58 Central Banks and Their Policies Money and Inflation in Yugoslavia. By Ashok Kumar Lahiri 751
E6 Macroeconomic Aspects of Public Finance, Macroeconomic Policy, and General Outlook International VAT Harmonization: Macroeconomic Effects. By Jacob A. Frenkel, Assaf Razin, and Steven Symansky 789
E60 General Welfare Costs of Inflation, Seigniorage, and Financial Innovation. By José De Gregorio 675
E62 Fiscal Policy; Public Expenditures and Finance; Taxation Taxation and the Cost of Capital in Hungary and Poland; A Comparison with Selected European Countries. By Krister Andersson 327
Economic and Monetary Union in Europe and Constraints on National Budgetary Policies. By A. Lans Bovenberg, Jeroen J.M. Kremers, and Paul R. Masson 374
E63 Comparative or Joint Analysis of Fiscal and Monetary or Stabilization Policy Money and Inflation in Yugoslavia. By Ashok Kumar Lahiri 751
F International Economics
F13 Commercial Policy; Protection; Promotion; Trade Negotiations Trade Liberalization in Developing Countries: Initial Trade Distortions and Imported Intermediate Inputs. By Jonathan D. Ostry 447
F30 International Finance—General From Centrally Planned to Market Economy: The Road from CPE to PCPE. By Guillermo A. Calvo and Jacob A. Frenkel 268
Macroeconomic Implications of Real Exchange Rate Targeting in Developing Countries. By Peter J. Montiel and Jonathan D. Ostry 872
F31 Exchange Rates; Foreign Exchange Intervention Structural Models of the Dollar. By Charles Adams and Bankim Chadha 525
Alternative Dual Exchange Market Regimes: Some Steady-State Comparisons. By J. Saul Lizondo 560
Stability of Velocity in the Major Industrial Countries: A Kalman Filter Approach. By Eduard J. Bomhoff 626
The Simplest Test of Target Zone Credibility. By Lars E.O. Svensson 655
Interest Rates in Mexico: The Role of Exchange Rate Expectations and International Creditworthiness. By Hoe E. Khor and Liliana Rojas-Suarez 850
On Interpreting the Random Walk and Unit Root in Nominal and Real Exchange Rates. By Charles Adams and Bankim Chadha 901
The Perils of Sterilization. By Guillermo A. Calvo 921
F32 Current Account Adjustment; Short-Term Capital Movements Trade Liberalization in Developing Countries: Initial Trade Distortions and Imported Intermediate Inputs. By Jonathan D. Ostry 447
F33 International Monetary Arrangements and Institutions Transitional Arrangements for Trade and Payments Among the CMEA Countries. By Peter B. Kenen 235
Economic and Monetary Union in Europe and Constraints on National Budgetary Policies. By A. Lans Bovenberg, Jeroen J.M. Kremers, and Paul R. Masson 374
The Simplest Test of Target Zone Credibility. By Lars E.O. Svensson 655
F34 International Lending and Debt Problems Market Valuation of Illiquid Debt and Implications for Conflicts Among Creditors. By Leonardo Bartolini and Avinash Dixit 828
Interest Rates in Mexico: The Role of Exchange Rate Expectations and International Creditworthiness. By Hoe E. Khor and Liliana Rojas-Suarez 850
F36 Financial Aspects of Economic Integration Monetary Policy in an Emerging European Economic and Monetary Union: Key Issues. By Jacob A. Frenkel and Morris Goldstein 356
F4 Macroeconomic Aspects of International Trade and Finance International VAT Harmonization: Macroeconomic Effects. By Jacob A. Frenkel, Assaf Razin, and Steven Symansky 789
F41 Open Economy Macroeconomics Trade Liberalization in Developing Countries: Initial Trade Distortions and Imported Intermediate Inputs. By Jonathan D. Ostry 447
Fiscal Policy, the Real Exchange Rate, and Commodity Prices. By Carmen M. Reinhart 506
Alternative Dual Exchange Market Regimes: Some Steady-State Comparisons. By J. Saúl Lizondo 560
Macroeconomic Implications of Real Exchange Rate Targeting in Developing Countries. By Peter J. Montiel and Jonathan D. Ostry 872
F42 International Policy Coordination Fiscal Policy, the Real Exchange Rate, and Commodity Prices. By Carmen M. Reinhart 506
G Financial Economics
G12 Asset Pricing Financial Market Volatility: A Survey. By Louis O. Scott 582
G14 Information and Market Efficiency Financial Market Volatility: A Survey. By Louis O. Scott 582
G15 International Financial Markets Taxation and the Cost of Capital in Hungary and Poland: A Comparison with Selected European Countries. By Krister Andersson 327
G20 Financial Institutions and Services—General From Centrally Planned to Market Economy: The Road from CPE to PCPE. By Guillermo A. Calvo and Jacob A. Frenkel 268
G32 Financing Policy; Capital and Ownership Structure Market Valuation of Illiquid Debt and Implications for Conflicts Among Creditors. By Leonardo Bartolini and Avinash Dixit 828
H Public Economics
H6 National Budget, Deficit, and Debt Economic and Monetary Union in Europe and Constraints on National Budgetary Policies. By A. Lans Bovenberg, Jeroen J.M. Kremers, and Paul R. Masson 347
H21 Efficiency; Optimal Taxation The Optimal Mix of Inflationary Finance and Commodity Taxation with Collection Lags. By Avinash Dixit 643
H22 Taxation and Subsidies—Incidence European Fiscal Harmonization and the French Economy. By W.R.M. Perraudin and T. Pujol 399
H25 Business Taxes Taxation and the Cost of Capital in Hungary and Poland: A Comparison with Selected Countries. By Krister Andersson 327
H62 Deficit Money and Inflation in Yugoslavia. By Ashok Kumar Lahiri 751
H87 International Fiscal Issues European Fiscal Harmonization and the French Economy. By W.R.M. Perraudin and T. Pujol 399
L Industrial Organization
L33 Boundaries of Public and Private Enterprise; Privatization; Contracting Out Proposals for Privatization in Eastern Europe. By Eduardo Borensztein and Manmohan S. Kumar 300
N Economic History
N12 United States; Canada: 1913–71 Capital Controls and the Gains from Trade in a Business Cycle Model of a Small Open Economy. By Enrique G. Mendoza 480
O Economic Development, Technological Change, and Growth
O54 Latin America; Caribbean Interest Rates in Mexico: The Role of Exchange Rate Expectations and International Creditworthiness. By Hoe E. Khor and Liliana Rojas-Suarez 850
P Economic Systems
P21 Planning and Coordination of Socialist Economies From Centrally Planned to Market Economy: The Road from CPE to PCPE. By Guillermo A. Calvo and Jacob A. Frenkel 268
P22 Prices Money and Inflation in Yugoslavia. By Ashok Kumar Lahiri 751 P33 Foreign Trade and Investment Transitional Arrangements for Trade and Payments Among the CMEA Countries. By Peter B. Kenen 235
P50 Comparative Economic Systems—General Proposals for Privatization in Eastern Europe. By Eduardo Borensztein and Manmohan S. Kumar 300
In statistical matter throughout this issue,
dots (…) indicate that data are not available;
a dash (—) indicates that the figure is zero or less than half the final digit shown, or that the item does not exist;
a single dot (.) indicates decimals;
a comma (,) separates thousands and millions;
“billion” means a thousand million, and “trillion” means a thousand billion;
a short dash (—) is used between years or months (for example, 1989–91 or January–October) to indicate a total of the years or months inclusive of the beginning and ending years or months;
a stroke (/) is used between years (for example, 1990/91) to indicate a fiscal year or a crop year;
a colon (;) is used between a year and the number indicating a quarter within that year (for example, 1991:2);
Components of tables may not add to totals shown because of rounding.