The Return of the Long-Run Phillips Curve

This paper integrate microfoundations of wage staggering into a simple dynamic general equilibrium model with rational expectations. In this context we show that a permanent increase in money growth leads to a permanent increase in the rate of inflation and a permanent reduction in the level of unemployment. In short, we derive a microfounded long-run downward-sloping Phillips curve.

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Year of publication:	2003-01
Authors:	Graham, Liam ; Snower, Dennis J.
Institutions:	C.E.P.R. Discussion Papers
Subject:	forward-looking expectations \| inflation \| monetary policy \| nominal inertia \| Phillips Curve \| unemployment

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Extent:	application/pdf
Series:	CEPR Discussion Papers.
Type of publication:	Book / Working Paper
Notes:	Number 3691
Classification:	E20 - Consumption, Saving, Production, Employment, and Investment. General ; E30 - Prices, Business Fluctuations, and Cycles. General ; E40 - Money and Interest Rates. General ; E50 - Monetary Policy, Central Banking and the Supply of Money and Credit. General
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005791529