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Discussions on "profit inflation" are mired in conceptual unclarities, definitional idiosyncrasies and data problems. This article attempts to bring conceptual clarity to the debate on profit inflation, defining profit inflation strictly as an increase in the gross output price that is caused by...
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When the current financial crisis has widened to a global economic crisis an urgent call for implementing financial markets and financial institutions in business cycle models emerged. By modelling commercial banks as a third type of economic agent, we are able to implement the feature of early...
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This paper examines whether monetary shocks can consistently generate stagflation in a dynamic, stochastic setting. I … possibility of changes in the monetary regime greatly improves the ability of money to generate stagflation. This is true whether … the regime actually changes or not. If the monetary regime changes on average once every ten years, stagflation occurs in …
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We analyze the dynamics of inflation in an economy characterized by a forward-looking, staggered, price and wage determination process, and by monetary accommodation. In our model, inflation reconciles the conflicting claims of workers and firms. The model is capable of generating a positive...
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Keynes attempted, in the general theory to develop a theory of the business cycle. However, this attempt was rather …
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