Paldam, Martin - School of Economics and Management, University of Aarhus - 2009
inflation dynamics. It
is not difficult, but a bit cumbersome. Parts of the analysis are done assuming that wages
grow at a … productivity in the private sector are the same, it generates no inflation. However,
the public sector has the same wage rises and … no productivity rises; the difference is the
inflation of the model.
4
As the public budget is balanced, taxes are the …