Inflation, credit, and indexed unit of account

초록

A simple monetary model is constructed to study the implications of an indexed unit of account (INDEXED-UOA). In an economy with an INDEXED-UOA, the credit-trade friction attributed to inflation can be resolved and unexpected inflation causes no redistribution effect between debtors and creditors. However, in an economy without an INDEXED-UOA, credit trades occur only if inflation is not too high and unexpected inflation renders debtors better off, but creditors worse off. In a high-inflation economy, money is used as a unit of account for spot trades only and an INDEXED-UOA emerges as a unit of account for deferred-payment trades. (c) 2015 Elsevier Inc All rights reserved.

키워드