Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/105876
Authors: 
Hein, Eckhard
Year of Publication: 
2005
Series/Report no.: 
IMK Working Paper 8/2005
Abstract: 
In a Kaleckian monetary distribution and growth model with conflict inflation we assess the role of a Non Accelerating Inflation Rate of Unemployment (NAIRU). The short run stability of a NAIRU is examined taking into account real debt effects of accelerating and decelerating inflation, and the short run effectiveness of monetary policy interventions applying the interest rate tool is analysed. The problem of long run endogeneity of the NAIRU is addressed integrating the long run distribution effects of monetary policies' real interest rate variations into the model. It is concluded that monetary policy interventions in order to stabilise inflation are either unnecessary or costly in terms of employment in the short run. In the long run, these policies bear the risk of continuously increasing the NAIRU in order to keep inflation under control, which yields a horizontal long run Phillips-curve and latent stagflation. Instead of relying on monetary policies, the cause of inflation should be directly addressed and wage bargaining co-ordination should be applied as an appropriate tool.
Subjects: 
Monetary policy
wage bargaining
inflation
distribution
growth
JEL: 
E12
E22
E24
E25
E52
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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