➡️ Raising inflation from 10% to 90%:
- Reduces aggregate capital by 8%
- Grows informality from 40% to 54% of GDP
➡️ Raising inflation from 10% to 90%:
- Reduces aggregate capital by 8%
- Grows informality from 40% to 54% of GDP
"High Inflation, Savings, and Informality"
Key idea: High inflation pushes households to use more cash for informal goods, cutting savings and hurting financial development. This tightens credit for formal firms, raising costs and fueling informality.
"High Inflation, Savings, and Informality"
Key idea: High inflation pushes households to use more cash for informal goods, cutting savings and hurting financial development. This tightens credit for formal firms, raising costs and fueling informality.
Check out his website: mbarbosaalves.github.io/index.html
Check out his website: mbarbosaalves.github.io/index.html