This paper offers a reappraisal of the inflation-unemployment tradeoff, based on ?frictional growth,? describing the interplay between nominal frictions and money growth. When the money supply grows in the presence of price inertia (due to staggered wage contracts with time discounting), the...

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...

This paper shows that the interaction between money growth and staggered nominal contracts gives rise to a long-run inflation-unemployment tradeoff.

Using a standard dynamic general equilibrium model, we show that the interaction of staggered nominal contracts with hyperbolic discounting leads to inflation having significant long-run effects on real variables.

In jüngster Zeit wurde eine Vielzahl von Kombilohnvorschlägen zur Bekämpfung der Arbeitslosigkeit gemacht (vgl. z.B. Sinn et al. 2006; Sachverständigenrat 2006). Diese sollen Abhilfe bei der persistenten Langzeitarbeitslosigkeit und den hohen Arbeitslosenraten bei Niedrigqualifizierten schaffen....

This paper offers a reappraisal of the inflation-unemployment tradeoff, based on ?frictional growth,? describing the interplay between nominal frictions and money growth. When the money supply grows in the presence of price inertia (due to staggered wage contracts with time discounting), the...

This paper offers a reappraisal of the inflation-unemployment tradeoff, based on ``frictional growth,'' describing the interplay between nominal frictions and money growth. When the money supply grows in the presence of price inertia (due to staggered wage contracts with time discounting), the...

This paper analyses the relation between US inflation and unemployment from the perspective of "frictional growth," a phenomenon arising from the interplay between growth and frictions. In particular, we examine the interaction between money growth (on the one hand) and various real and nominal...

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...