사회적 갈등 요인으로서의 인플레이션의 후생비용 측정

Abstract

This paper measures the social costs of inflation taking into consideration both distorting taxes and productive government expenditures. Like other taxes, inflation can be a main source of economic conflicts. It is therefore essential to assess its costs precisely when working on mediation of social conflicts. Inflation increases the opportunity cost of holding money and hence causes distortions from transaction activities to non-transaction activities like leisure. Therefore, even if it is anticipated, inflation results in the welfare costs. There have been studies measuring these welfare costs quantitatively using real business cycle models with money. However, when they examine how the presence of other distorting taxes affects the welfare cost of inflation, a positive role for the government spending is not taken into account. In order to investigate how the results in the literature change when government expenditures are productive, this paper constructs a model economy wherein the public capital stock is productive. One of the key findings from the investigation is that the same rate of inflation causes more welfare costs in an economy with more productive government expenditures. In addition, the quantitative results show that other distorting taxes do not affect the welfare costs of inflation so much as assessed in previous studies. However the welfare cost of 5 percent annual inflation is estimated to be 0.374 percent of total output. It would amount to ₩5.2 trillion at the level of the Korean GNP for year 2012, which equals 11.4 percent of all the income taxes paid for that year. Moreover the welfare costs of higher inflation rates, which are not necessarily unrealistic, seem significantly high.