How Costly Is Sustained Low Inflation for the U.S. Economy?
Why this work is in the frame
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Bibliographic record
Abstract
take the form of permanent changes in the growth rate of the base money stock that produce permanent changes in the rate of inflation.We follow the bulk of the inflation-cost literature by basing our cost estimates on comparisons of alternative steady states.We follow the recent trend in applied macroeconomic theory by calibrating our model to increase the empirical credibility of its predictions.The principal goal of our calibration procedure is to produce a steady-state equilibrium that matches certain longrun-average features of U.S. postwar data.We have given the model a variety of characteristics that increase both its overall plausibility and its ability to mimic these data.The characteristics include households that live for a large but finite number of periods, exogenous technological progress, exogenous population growth, costly financial intermediation, and endogenous labor-leisure decisions.The model also includes a fairly elaborate government sector, including real expenditures (government purchases), taxes on labor and capital income, seigniorage revenue, and government debt.The importance of the role played by the government sector is a distinctive feature of our analysis.A characteristic of the observed public finance system that plays a key role in driving our results is that capital income taxes are levied on net nominal income, so that increases in the inflation rate increase effective capital income tax rates.In this respect, our analysis is similar to recent work by Feldstein (1997) andAbel (1997).However, their estimates of the cost of inflation are based largely on the tendency of higher effective capital income tax rates to increase the wedge between the before-tax and
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Full frame distilled prediction
Teacher imitationNot calibrated prevalence, not ground truth. Human validation pending. Learned from the 10,348 direct Codex labels and 10,348 direct Gemma labels. Candidate is the union of thresholded teacher heads; consensus is their intersection. These outputs are machine_predicted_unvalidated and are not human labels or direct frontier model labels.
Codex and Gemma teacher scores by category
| Category | Codex | Gemma |
|---|---|---|
| Metaresearch | 0.001 | 0.001 |
| Meta-epidemiology (narrow) | 0.000 | 0.000 |
| Meta-epidemiology (broad) | 0.001 | 0.000 |
| Bibliometrics | 0.000 | 0.000 |
| Science and technology studies | 0.000 | 0.000 |
| Scholarly communication | 0.001 | 0.001 |
| Open science | 0.002 | 0.002 |
| Research integrity | 0.001 | 0.001 |
| Insufficient payload (model declined to judge) | 0.000 | 0.000 |
Machine scores (provisional)
The two teacher heads of the student model, read on this work. A score orders the frame for review; it never asserts a category, and the validation status ships verbatim with every row.
Baseline scores from an immature model (maturity gate not passed, 7 training rounds). Scores rank; they never assert a category.
score_only:v0-immature-baseline · verbatim from the scoring run: score_only means the number may rank works, and no category label ships from it