"The conventional wisdom that inflation and unemployment are unrelated in the long-run implies that these phenomena can … be analysed by separate branches of economics. The macro literature tries to explain inflation dynamics and estimates the … long-run and that it cannot generate substantial inflation persistence relies on the implausible assumption of a zero …

This paper offers a reappraisal of the inflation-unemployment tradeoff, based on "frictional growth" describing the … able to work themselves out fully. In this context, monetary shocks have a gradual and delayed effect on inflation, and … these shocks also generate plausible impulse-responses for unemployment. Although our theory contains no money illusion, no …

-run inflation-unemployment tradeoff. …

hyperbolic discounting leads to inflation having significant long-run effects on real variables. -- Inflation ; unemployment …

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 …. -- optimal monetary policy ; inflation targeting ; unemployment ; Phillips curve ; nominal inertia ; monetary policy …

This paper analyzes the relationship between unemployment and wage inflation for 10 of the euro area countries. The … combination of low wage inflation and high unemployment in Europe is usually attributed to a rise in the natural rate of … unemployment that may account for a changing pattern in the unemployment inflation trade-off. Moreover, it analyzes whether the …

" - although they generate price inertia, they cannot account for the stylised fact of inflation persistence. It is thus commonly … asserted that, in the context of the new Phillips curve (NPC), inflation is a jump variable. We argue that this "persistency … equilibrium setting (in which real variables not only affect inflation, but are also influenced by it), standard wage …

inflation and unemployment. We focus on the G7 economies plus Spain, and use monthly data –high-frequency data in a macro …

The paper examines how the long-run inflation-unemployment tradeoff depends on the degree to which wage-price decisions …