Inflation acts as a tax on private monetary wealth, thereby enabling the
government to command real resources via inflationary monetary issue.
Curiously, the inflation tax on money concept has never been integrated into
the IS-LM tradition of macroeconomic analysis. This article illustrates how
inflation as a tax on money can be dealt with in IS-LM terms. By remedying this
long-standing gap in macroeconomics literature, the IS-LM tradition in
macroeconomics is more open to discussion of issues related to the inflation
tax.
Get full access to this article
View all access options for this article.
References
1.
Anderson, W. (1979) National Income Theory and Its Price Theoretic Foundations. New York: McGraw-Hill .
2.
Aurenheimer, L. (1974) "The honest government's guide to the revenue from the creation of money," J. of Pol. Economy82 (May/June): 598-606.
3.
Bailey, M. (1956) "The welfare cost of inflation," J. of Pol. Economy64 (April): 93-110.
4.
Beare, J. (1978) Macroeconomics. New York: Macmillan.
5.
Branson, W. and J. Litvack (1976) Macroeconomics. New York : Harper &, Row.
6.
Cagan, P. (1956) "The monetary dynamics of hyperinflation," in M. Friedman (ed.) Studies in the Quantity Theory of Money. Chicago: Univ. of Chicago Press.
7.
Darby, M. (1979) Intermediate Macroeconomics. New York: McGraw-Hill.
8.
Dernburg, T. and D. McDougall (1980) Macroeconomics. New York: McGraw-Hill,
9.
Dornbusch, R. and S. Fischer (1978) Macroeconomics. New York: McGraw-Hill.
10.
Edgmand, M. (1979) Macroeconomics : Theory and Policy. Englewood Cliffs, NJ:Prentice-Hall.
11.
Elliot, J. (1979) Macroeconomic Analysis. Cambridge, MA: Winthrop Publishers.
12.
Friedman, M. (1953) "Discussion of the inflationary gap," in Essays in Positive Economics. Chicago: Univ. of Chicago Press.
13.
— (1971) "The revenue from inflation," J. of Pol. Economy79 (March / April): 323-337.
14.
Glahe, F. (1977) Macroeconomics: Theory and Policy. New York: Harcourt Brace Jovanovich.
15.
Gordon, R. (1918) Macroeconomics. Boston: Little, Brown.
16.
Grubel, H. (1969) "The distribution of seigniorage from international liquidity creation," pp. 269-282 in R. Mundell and A. Swoboda (eds.) Monetary Problems of the International Economy. Chicago: Univ. of Chicago Press.
17.
Havrilesky, T. and J. Boorman (1978) Monetary Macroeconomics. Arlington Heights, IL: AHM Publishing.
18.
Hosek, W. (1975) Macroeconomic Theory. Homewood, IL: Irwin.
19.
— and F. Zahn (1977) Monetary Theory, Policy, and Financial Markets . New York: McGraw-Hill.
20.
Johnson, H. (1967) "A survey of theories of inflation," in Essays in Monetary Economics. Cambridge, MA: Harvard Univ. Press.
21.
——— (1909) "Appendix: a note on seigniorage and the social saving from substituting credit for commodity money," pp. 323-329 in R. Mundell and A. Swoboda (eds.) Monetary Problems of the International Economy . Chicago: Univ. of Chicago Press .
22.
Kennedy, P. (1975) Macroeconomics. Boston: Allyn & Bacon.
23.
Lovell, M. (1975) Macroeconomics: Measurement, Theory, and Policy . New York: John Wiley.
24.
Makin, J. (1975) Macroeconomics. Hinsdale, IL : Dryden.
25.
McKenna, J. (1977) Aggregate Economic Analysis. Hinsdale, IL: Dryden.
26.
Meyer, L. (1980) Macroeconomics: A Model Building Approach. Cincinnati, OH: South-Western Publishing .
27.
Nichols, D. (1974) "Some principles of inflationary finance," J. of Pol. Economy82 (March/April): 423-430.
28.
Ott, D., A. Ott, and J. Yoo ( 1975) Macroeconomic Theory. New York : McGraw-Hill.
29.
Peterson, W. (1978) Income, Employment, and Economic Growth. New York: Norton.
30.
Poindexter, J. (1976) Macroeconomics. Hinsdale, IL : Dryden.
31.
Ruebling, C. (1975) "Financing government through monetary expansion and inflation," Federal Reserve Bank of St. Louis Rev.57 (February): 15-23.
32.
Tatom, J. (1976) "The welfare cost of inflation," Federal Reserve Bank of St. Louis Rev.58 (November): 9-22.
33.
——— (1979) "The marginal welfare cost of the revenue from money creation and the 'optimal' rate of inflation," Manchester School of Econ. and Social Studies47 (December) : 359-368.
34.
Turnovsky, S. (1977) Macroeconomic Analysis and Stabilization Policy . New York: Cambridge Univ. Press.
35.
Van Cott, T. and G. Santoni (1976) "Consumption-based private to public redistribution during inflation," Public Finance Q. (4): 453-464.
36.
Wykoff, F. (1976) Macroeconomics. Englewood Cliffs, NJ: Prentice-Hall.
37.
Zahn, F. (1975) Macroeconomic Theory and Policy. Englewood Cliffs, NJ:Prentice-Hall.
