Citation

Discussion Paper Details

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Title: The Return of the Long-Run Phillips Curve

Author(s): Liam Graham and Dennis J. Snower

Publication Date: January 2003

Keyword(s): forward-looking expectations, inflation, monetary policy, nominal inertia, Phillips Curve and unemployment

Programme Area(s): Labour Economics

Abstract: 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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Bibliographic Reference

Graham, L and Snower, D. 2003. 'The Return of the Long-Run Phillips Curve'. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=3691