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http://hdl.handle.net/10419/4032
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| Title: | | The evolution of inflation and unemployment: Explaining the roaring nineties  |
| Authors: | | Karanassou, Marika Sala, Héctor Snower, Dennis J. |
| Issue Date: | | 2007 |
| Series/Report no.: | | Kieler Arbeitspapiere 1350 |
| Abstract: | | This paper argues that there is a nonzero inflation-unemployment tradeoff in the long-run due to frictional growth, a phenomenon that encapsulates the interplay of nominal staggering and money growth. The existence of a downward-sloping long-run Phillips curve suggests the development of a holistic framework that can jointly explain the evolution of inflation and unemployment. Hence, we estimate an interactive dynamics model for the US that includes wage-price setting and labour market equations. We then evaluate the inflation-unemployment tradeoff and assess the impact of productivity, money growth, budget deficit, and trade deficit on the unemployment and inflation trajectories during the nineties. |
| Subjects: | | Inflation dynamics Unemployment dynamics Phillips curve Roaring nineties |
| JEL: | | E31 E51 E24 E62 |
| Document Type: | | Working Paper |
| Appears in Collections: | | Publikationen von Forscherinnen und Forschern des IfW Economists Online Kieler Arbeitspapiere, IfW
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