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Study of the welfare cost of infl ation in China

Author

Listed:
  • CHEN Yanbin

    (School of Economics, Renmin University of China, Beijing 100872, China)

  • MA Lili

    (School of Economics and Management, Wuhan University, Wuhan 430072, China)

Abstract

Inflation is always an important indicator to measure whether economy is stable and healthy. This paper provides a substantive survey of the research on the welfare cost of inflation, and uses the methods of consumer's surplus and neo-classical general equilibrium models respectively to estimate the welfare cost of inflation in China. The results show that high inflation will cause huge welfare cost in China, so keeping low inflation is beneficial to the entire economic welfare of China.

Suggested Citation

  • CHEN Yanbin & MA Lili, 2007. "Study of the welfare cost of infl ation in China," Frontiers of Economics in China-Selected Publications from Chinese Universities, Higher Education Press, vol. 2(4), pages 490-519, December.
    • Handle: RePEc:fec:journl:v:2:y:2007:i:4:p:490-519
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    File URL: http://journal.hep.com.cn/fec/EN/10.1007/s11459-007-0026-9
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    More about this item

    Keywords

    money; inflation; welfare cost;
    All these keywords.

    JEL classification:

    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • E41 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Demand for Money
    • E17 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Forecasting and Simulation: Models and Applications

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