The long-run relation between growth and inflation has not yet been studied in the context of nominal price and wage … integrate staggered price- and wage-setting into an endogenous growth framework. In this setting, growth and inflation are … linked via the incentive to innovate. For standard calibrations, the linkage is strong: as trend inflation shifts from -5 to …

): "lf the true and fully anticipated rate of inflation has stabilized at a low level, i.e. two per cent, is the gain from … reducing inflation to zero worth the sacrifice in output and employment that would be required to achieve it?" ... …