The Welfare Costs of Moderate Inflations

@article{Cooley1991TheWC,
  title={The Welfare Costs of Moderate Inflations},
  author={Thomas F. Cooley and Gary D. Hansen},
  journal={Journal of Money, Credit and Banking},
  year={1991},
  volume={23},
  pages={483-518}
}
IN THE RECENT PAST THE VIEW that a little bit of inflation was good for the economy was widely held. The Phillips curve, in its earlier incarnations, implied that moderate inflation was worth tolerating because it would permit lower unemployment. This justification for tolerating inflation has long since been abandoned by economists and policymakers because both theory and experience showed it to be false. Nevertheless, one legacy of this era seems to be a fairly widespread tolerance for… 

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