Money growth leads to higher prices, lower welfare, and search intensity confusion.
The article explores how changes in the amount of money circulating in the economy can affect the range of prices for goods and overall welfare. By considering different preferences among buyers, the researchers show that increasing the amount of money can lead to a wider range of prices and lower welfare. However, when buyers adjust how much they search for goods based on money growth, there can be different outcomes. In some cases, more money can actually improve welfare, increase search intensity, and reduce price variation.