The effect of inflation on growth investments: A note
Keywords:inflation, no-reinvestment, BV
Motivated by the pioneering work of Brenner and Venetia (1983), henceforth designated as BV, a previous note that focused attention on the effect of taxation on the optimal duration of investments in a non-inflationary environment (de Faro, 1996), the present note is aimed at investigating the effects of inflation on the optimal duration of investments. Specifically, considering the no-reinvestment case only, our objective is to include in the analysis both a numerical illustration of the peculiar results of BV as well as indexation procedures that have been used in some high inflation economies.
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