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| Title: | | An anatomy of the Phillips curve  |
| Authors: | | Karanassou, Marika 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 |
| JEL: | | J3 E2 E5 E3 |
| Document Type: | | Working Paper |
| Appears in Collections: | | Working Paper Series, School of Economics and Finance, Queen Mary, University of London Publikationen von Forscherinnen und Forschern des IfW Economists Online
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