Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/4014
Authors: 
Karanassou, Marika
Sala, Hector
Snower, Dennis J.
Year of Publication: 
2007
Series/Report no.: 
Kiel Working Paper 1326
Abstract: 
This paper takes a new look at the long-run dynamics of inflation and unemployment in response to permanent changes in the growth rate of the money supply. We examine the Phillips curve from the perspective of what we call "frictional growth", i.e. the interaction between money growth and nominal frictions. After presenting a theoretical model of this phenomenon, we construct an empirical model of the Spanish economy and, in this context, we evaluate the long-run inflation-unemployment tradeoff for Spain and examine how recent policy changes have affected it.
Subjects: 
Phillips curve
Staggered wage contracts
Nominal inertia
Forward-looking expectations
Monetary policy
Inflation-unemployment tradeoff
JEL: 
E2
E3
E5
J3
E4
Document Type: 
Working Paper

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