Araújo, Ricardo Azevedo; Flaschel, Peter; Moreira, … - In: Economia : revista da ANPEC 21 (2020) 2, pp. 145-159
In the present paper, we study how the dynamics of Foley’s model may be affected by the introduction of a money wage Phillips curve with a perfect spill-over of price inflation on wage inflation. The upshot is a model with endogenous price and wage dynamics with unstable equilibrium, meaning...