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http://hdl.handle.net/10419/2910
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| Title: | | An anatomy of the Phillips curve  |
| Authors: | | Snower, Dennis J. Karanassou, Marika |
| Issue Date: | | 2002 |
| Series/Report no.: | | IZA Discussion paper series 635 |
| Abstract: | | The paper examines how the long-run inflation-unemployment tradeoff depends on the degree to which wage-price decisions are backward- versus forward-looking. When economic agents, facing time-contingent, staggered nominal contracts, have a positive rate of time preference, the current wage and price levels depend more heavily on past variables (e.g. past wages and prices) than on future variables. Consequently, the long-run Phillips curve becomes downward-sloping and, indeed, quit flat for plausible parameter values. This paper provides an intuitive account of how this long-run Phillips curve arises. |
| Subjects: | | inflation-unemployment tradeoff wage-price staggering monetary policy forward- and backward-looking wage-price behavior traditional and New Phillips curve |
| JEL: | | J3 E2 E3 E5 |
| Document Type: | | Working Paper |
| Appears in Collections: | | Publikationen von Forscherinnen und Forschern des IfW IZA Discussion Papers, Forschungsinstitut zur Zukunft der Arbeit (IZA) Economists Online
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| dp635.pdf | | 323.07 kB | Adobe PDF |
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