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|Title:||An anatomy of the Phillips curve |
Snower, Dennis J.
|Issue Date:||2002 |
|Series/Report no.:||Working paper series, Department of Economics, Queen Mary College, London 478|
|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 Philipps curvebecomes downward-sloping and, indeed, quite flat for plausible parameter values. This paper provides an intuitive account of how this long-run Philipps curve arises.|
|Subjects:||Inflation-unemployment tradeoff , wage-price staggering , monetary policy , forward- and backward looking wage-price behavior|
|Document Type:||Working Paper|
|Appears in Collections:||Working Paper Series, School of Economics and Finance, Queen Mary, University of London |
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