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Hyperbolic Discounting and Positive Optimal Inflation

Graham, Liam; Snower, Dennis J. - C.E.P.R. Discussion Papers - 2011

The Friedman rule states that steady-state welfare is maximized when there is deflation at the real rate of interest. Recent work by Khan et al. (2003) uses a richer model but still finds deflation optimal. In an otherwise standard new Keynesian model we show that, if households have hyperbolic...

Persistent link: https://www.econbiz.de/10009643503

Monetary Persistence, Imperfect Competition and Staggering Complementarities

Merkl, Christian; Snower, Dennis J. - C.E.P.R. Discussion Papers - 2006

This paper explores the influence of wage and price staggering on monetary persistence. We show that, for plausible parameter values, wage and price staggering are highly complementary in generating monetary persistence. We do so by proposing the new measure "quantitative persistence," after...

Persistent link: https://www.econbiz.de/10005666458

Firm-Specific Capital, Nominal Rigidities and the Business Cycle

Altig, David E; Christiano, Lawrence J.; Eichenbaum, Martin - C.E.P.R. Discussion Papers - 2005

Macroeconomic and microeconomic data paint conflicting pictures of price behaviour. Macroeconomic data suggest that inflation is inertial. Microeconomic data indicate that firms change prices frequently. We formulate and estimate a model that resolves this apparent micro/macro conflict. Our...

Persistent link: https://www.econbiz.de/10005667053

Long-Run Inflation-Unemployment Dynamics: The Spanish Phillips Curve and Economic Policy

Karanassou, Marika; Sala, Hector; Snower, Dennis J. - C.E.P.R. Discussion Papers - 2003

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...

Persistent link: https://www.econbiz.de/10005788925

The Return of the Long-Run Phillips Curve

Graham, Liam; Snower, Dennis J. - C.E.P.R. Discussion Papers - 2003

This paper integrate microfoundations of wage staggering into a simple dynamic general equilibrium model with rational expectations. In this context we show that a permanent increase in money growth leads to a permanent increase in the rate of inflation and a permanent reduction in the level of...

Persistent link: https://www.econbiz.de/10005791529

Inflation and Inequality

Albanesi, Stefania - C.E.P.R. Discussion Papers - 2002

Cross-country evidence on inflation and inequality suggests that they are positively correlated. I explore the hypothesis that this correlation is the outcome of a distributional conflict underlying the determination of fiscal policy.

Persistent link: https://www.econbiz.de/10005792380

Natural Rate Doubts

Farmer, Roger E A - C.E.P.R. Discussion Papers - 2000

This paper provides evidence for a low frequency relationship between unemployment, inflation and the nominal interest rate. I show that in the United States from 1959.1 to 1991.3, the unemployment rate, the inflation rate and the federal funds rate can be modelled as non stationary time series...

Persistent link: https://www.econbiz.de/10005792534

Money is an Experience Good: Competition and Trust in the Private Provision of Money

Marimon, Ramon; Nicolini, Juan Pablo; Teles, Pedro - C.E.P.R. Discussion Papers - 2009

We study the interplay between competition and trust as efficiency-enhancing mechanims in the private provision of money. With commitment, trust is automatically achieved and competition ensures efficiency. Without commitment, competition plays no role. Trust does play a role but requires a...

Persistent link: https://www.econbiz.de/10004976784

A Small Corner of Intertemporal Public Finance - New Developments in Monetary Economics: Two Ghosts, Two Eccentricities, a Fallacy, a Mirage and a Mythos

Buiter, Willem H. - C.E.P.R. Discussion Papers - 2004

Monetary theory and policy are part of intertemporal public finance. This Paper reviews some interesting recent … developments. The two ghosts are the venerable liquidity trap and the Pigou effect or real balance effect. The eccentricities are … the so-called Fiscal Theory of the Price Level, a logically inconsistent theory of the link between the government budget …

Persistent link: https://www.econbiz.de/10005123549

Does the Length of the Period Really Matter for the Identification and the Modelling of Monetary Policy Shocks?

Gallès, Clémentine; Portier, Franck - C.E.P.R. Discussion Papers - 2004

In this Paper, we ask whether our empirical and theoretical knowledge about the effect of monetary policy shocks is robust to the choice of the period length. We think that such a question is particularly relevant in the monetary literature, as frictions are often introduced under the form of a...

Persistent link: https://www.econbiz.de/10005123871

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