Lahcen, Mohammed Ait; Baughman, Garth; Rabinovich, Stanislav - 2021 - This version: June 3, 2021
We argue that long-run inflation has nonlinear and state-dependent effects on unemployment, output, and welfare. Using panel data from the OECD, we document three correlations. First, there is a positive long-run relationship between anticipated inflation and unemployment. Second, there is also...