contracts and positive inflation. Workers with relatively low incomes experience envy, whereas those with relatively high … incomes experience guilt. The former seek to raise their income, and latter seek to reduce it. The greater the inflation rate …, a rise in the inflation rate leads workers to supply more labor over the contract period, generating a significant …

inflation and a permanent reduction in the level of unemployment. In short, we derive a microfounded long-run downward …

producers. I apply these results to a model of inflation. I find that the model can fit the quantitative facts on post …-war inflation remarkably well, that it is a good forecaster of future inflation, and that it survives the Lucas critique by fitting … also the pre-war facts on inflation moderately well. …

. Motivated by the case of an unanticipated inflation episode, we consider redistribution shocks that shift resources from old to …

Episodes of unanticipated inflation reduce the real value of nominal claims and thus redistribute wealth from lenders … to borrowers. In this study, we consider redistribution as a channel for aggregate and welfare effects of inflation. We … model an inflation episode as an unanticipated shock to the wealth distribution in a quantitative overlapping …

From 1970 to 1985, Israel experienced high inflation. It rose in three jumps to new plateaus and eventually exceeded … of fallen bank shares caused the last big jump in inflation that occurred in October 1983. Bank shares had just collapsed …. Because that was foreseen, inflation immediately rose as predicted by the unpleasant monetarist arithmetic of Sargent and …

This paper provides a quantitative assessment of the effects of inflation through changes in the value of nominal … redistribution brought about by a moderate inflation episode. Redistribution takes the form of 'ends-against-the-middle': the middle … class gains at the cost of the rich and poor. In addition, inflation favours the young over the old, and hurts foreigners. A …

Keynesian model we show that, if households have hyperbolic discounting, small positive rates of inflation can be optimal. In … our baseline calibration, the optimal rate of inflation is 2.1% and remains positive across a wide range of calibrations. …

This Paper takes a new look at the long-run dynamics of inflation and unemployment in response to permanent changes in …, we construct an empirical model of the Spanish economy and, in this context, we evaluate the long-run inflation …