Karanassou, Marika; Sala, Hector; Snower, Dennis J. - School of Economics and Finance, Queen Mary - 2002
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 … permanent nominal rigidities, and no departure from rational expectations, there is a long-run inflation-unemployment tradeoff. …