Karanassou, Marika; Sala, Héctor; Snower, Dennis J. - Kiel Institute for the World Economy - 2005
This paper offers a reappraisal of the inflation-unemployment tradeoff, based on ?frictional growth,? describing the … interplay between nominal frictions and money growth. When the money supply grows in the presence of price inertia (due to … able to work themselves out fully. In this context, temporary nominal rigidities let monetary policy have permanent real …