Code for
"Welfare-enhancing inflation and liquidity premia"
by David Andolfatto and Fernando M. Martin

This document explains how to produce Figures 1 and 2. There are two main files: Charts.nb and Charts.xlsx. There are also four .dat files which are the output of Charts.nb and the input of Charts.xlsx.

Charts.nb is a Mathematica notebook file, written in version 13.2. The first section of the code, called a "cell", solves the model analytically and sets parameters, as described in Section 4.2.2. The next four cells output the data used to construct the figures in Excel. Each cell considers a particular policy; plots the asset portfolio and welfare for each ex-ante type of agent, as functions of beta (the plots are used to verify values of beta for which the portfolio solutions are interior); and outputs a file with welfare for each type as a function of beta and the corresponding policy for q. The output files are named: output0.dat, output1.dat, output2.dat and output3.dat Each cell in the notebook is executed by selecting and pressing Shift+Enter. The first cell takes about two minutes to solve; the reamining cells with the plots take only a few seconds each. 

Charts.xlsx is an Excel file that takes the output files from Charts.nb and constructs Figures 1 and 2. The first page, labeled "Input", has parameter values as well as the output from Charts.nb. There are labels in the first row to indicate where each data file was copied. For each policy, the file computes the ex-ante welfare in the columns labeled "EW". These are the series that are plotted in the pages labeled "Figure 1" and "Figure 2".