Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/92635
Authors: 
Hirose, Ken-Ichi
Ikeda, Shinsuke
Year of Publication: 
2004
Series/Report no.: 
ISER Discussion Paper, Institute of Social and Economic Research, Osaka University 622
Abstract: 
Unlike the standard assumption that the degree of impatience, measured by the rate of time preference, is increasing in wealth, empirical studies support that impatience ismarginally decreasing. By introducing decreasing marginal impatience into the neoclassical monetary growth model á la Sidrauski, we show that (i) consistently with empirical results, an increase in the core rate of inflation reduces capital stocks in a steady state; and that (ii) its long-run welfare cost is larger than predicted with increasing or constant marginal impatience, implying that estimates of the inflation cost which have so far been obtained by assuming constant time preference may be underestimates.
Subjects: 
decreasing marginal impatience
time preference
inflation
the Tobin effect
JEL: 
D90
E00
Document Type: 
Working Paper

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