Karanassou, Marika; Sala, Héctor; Snower, Dennis J. - Kiel Institute for the World Economy - 2005
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 price adjustments to each successive change in the money supply are never … effects. Although our theory contains no money illusion, no permanent nominal rigidities, and no departure from rational …