Karanassou, Marika; Sala, Hector; Snower, Dennis J. - School of Economics, UNSW Business School - 2008
of macroeconomics. While one branch of the literature models inflation dynamics and estimates the unemployment rate …. In the context of the new Phillips curve (NPC), we show that frictional growth, i.e. the interplay between lags and … reaction theory (CRT), should be used to jointly explain the evolution of inflation and unemployment. A further attraction of …