{"status":"ok","message-type":"work","message-version":"1.0.0","message":{"indexed":{"date-parts":[[2025,12,31]],"date-time":"2025-12-31T12:21:02Z","timestamp":1767183662970},"reference-count":87,"publisher":"Cambridge University Press (CUP)","issue":"2","license":[{"start":{"date-parts":[[2017,6,9]],"date-time":"2017-06-09T00:00:00Z","timestamp":1496966400000},"content-version":"unspecified","delay-in-days":0,"URL":"https:\/\/www.cambridge.org\/core\/terms"}],"content-domain":{"domain":["www.cambridge.org"],"crossmark-restriction":true},"short-container-title":["Macroecon. Dynam."],"published-print":{"date-parts":[[2019,3]]},"abstract":"<jats:p>Money-demand specifications exhibit instability, especially for long spans of data. This paper reconsiders the welfare cost of inflation for the US economy using a flexible time-varying (TV) cointegration methodology to estimate the money-demand function. We find evidence that the TV cointegration estimation provides a better fit of the actual data than a time-invariant estimation and that the throughout unitary income elasticity only exists for the log\u2013log form over the entire sample period. Our estimate of the welfare cost of inflation for a 10% inflation rate lies in the range of 0.025\u20130.75% of gross domestic product (GDP) and averages 0.27%. In sum, our findings fall well within the ranges of existing studies of the welfare cost of inflation. We find that the welfare cost averages 7.4% higher during expansions than recessions for 10% inflation rate. Finally, the interest elasticity of money demand shows substantial variability over our sample period.<\/jats:p>","DOI":"10.1017\/s1365100517000037","type":"journal-article","created":{"date-parts":[[2017,6,9]],"date-time":"2017-06-09T05:50:03Z","timestamp":1496987403000},"page":"775-797","update-policy":"http:\/\/dx.doi.org\/10.1017\/policypage","source":"Crossref","is-referenced-by-count":9,"title":["A TIME-VARYING APPROACH OF THE US WELFARE COST OF INFLATION"],"prefix":"10.1017","volume":"23","author":[{"given":"Stephen M.","family":"Miller","sequence":"first","affiliation":[]},{"given":"Luis Filipe","family":"Martins","sequence":"additional","affiliation":[]},{"given":"Rangan","family":"Gupta","sequence":"additional","affiliation":[]}],"member":"56","published-online":{"date-parts":[[2017,6,9]]},"reference":[{"key":"S1365100517000037_ref86","doi-asserted-by":"publisher","DOI":"10.1016\/S0165-1889(97)00067-5"},{"key":"S1365100517000037_ref85","doi-asserted-by":"crossref","first-page":"371","DOI":"10.1007\/BF01294413","article-title":"A money demand system for German M3","volume":"23","author":"Wolters","year":"1998","journal-title":"Empirical Economics"},{"key":"S1365100517000037_ref84","doi-asserted-by":"publisher","DOI":"10.1016\/j.econlet.2011.01.001"},{"key":"S1365100517000037_ref81","first-page":"153","article-title":"Rebalancing frequency and the welfare cost of inflation","volume":"4","author":"Silva","year":"2012","journal-title":"American Economic Journal: Macroeconomics"},{"key":"S1365100517000037_ref80","doi-asserted-by":"publisher","DOI":"10.1016\/j.econlet.2004.02.002"},{"key":"S1365100517000037_ref78","doi-asserted-by":"publisher","DOI":"10.1017\/S1365100507050298"},{"key":"S1365100517000037_ref77","doi-asserted-by":"publisher","DOI":"10.1017\/S1365100505040307"},{"key":"S1365100517000037_ref75","doi-asserted-by":"publisher","DOI":"10.1080\/09603107.2011.568395"},{"key":"S1365100517000037_ref72","first-page":"37","article-title":"Shoe-leather costs of inflation and policy credibility","volume":"80","author":"Pakko","year":"1998","journal-title":"Federal Reserve Bank of St. Louis Review"},{"key":"S1365100517000037_ref71","doi-asserted-by":"publisher","DOI":"10.1111\/1468-0262.00256"},{"key":"S1365100517000037_ref68","unstructured":"Mogliani M. and G. 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