Citation

Discussion Paper Details

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Title: Long-Run Inflation-Unemployment Dynamics: The Spanish Phillips Curve and Economic Policy

Author(s): Marika Karanassou, Hector Sala and Dennis J. Snower

Publication Date: January 2003

Keyword(s): forward-looking expectations, inflation-unemployment tradeoff, monetary policy, nominal inertia, phillips curve and staggered wage contracts

Programme Area(s): Labour Economics

Abstract: This Paper takes a new look at the long-run dynamics of inflation and unemployment in response to permanent changes in the growth rate of the money supply. We examine the Phillips curve from the perspective of what we call ?frictional growth?, i.e. the interaction between money growth and nominal frictions. After presenting theoretical models of this phenomenon, we construct an empirical model of the Spanish economy and, in this context, we evaluate the long-run inflation-unemployment tradeoff for Spain and examine how recent policy changes have affected it.

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Bibliographic Reference

Karanassou, M, Sala, H and Snower, D. 2003. 'Long-Run Inflation-Unemployment Dynamics: The Spanish Phillips Curve and Economic Policy'. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=3690