Inflation gifts and endogenous growth through learning-by-doing
Andrea Vaona
No 09/2013, Working Papers from University of Verona, Department of Economics
Abstract:
We investigate the link between inflation, growth and unemployment nesting a model of fair wages into one of endogenous growth of learning by doing and assuming that firms protect wages' purchasing power against inflation in exchange of worker's effort. Unemployment decreases with higher inflation and real growth rates. These effects tends to vanish as inflation and growth increase. Depending on the assumptions on learning-by-doing mechanisms, the effect of inflation on growth can be either nil or positive, but tiny. The Appendix shows that the short run effects of a monetary shocks mirror the long-run effects of inflation.
Keywords: efficiency wages; money growth; long-run Phillips curve; trend inflation (search for similar items in EconPapers)
JEL-codes: E2 E3 E4 E5 (search for similar items in EconPapers)
Date: 2013-05
New Economics Papers: this item is included in nep-fdg, nep-mac and nep-mon
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Persistent link: https://EconPapers.repec.org/RePEc:ver:wpaper:09/2013
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