Inflation and the Business Cycle: Further Investigations after the Last Cycle

Bertrand C.B. Candelon
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Bertrand C.B. Candelon: UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES)

No 1998015, LIDAM Discussion Papers IRES from Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES)

Abstract: This paper aims at investigating relationships between inflation and macroeconomic fluctuations. The theoretical debate associated to this question is important: Whereas the Keynesian expect a countercyclical behavior of inflation, Real Business Cycles theorists, stressing on the supply side, conjecture the opposite profile. Our empirical investigation (G7 countries are considered) leads to two major results : Prices stability is destabilizing and inflation exhibit a procyclical behavior (contrary to prices). Moreover, it appears that these stylized facts are verified over the last 30 years. This result is in the line with the neokeynesian point of view.

Keywords: Business Cycle; Inflation; Recent Economics History (search for similar items in EconPapers)
JEL-codes: E2 (search for similar items in EconPapers)
Pages: 31
Date: 1998-05-01
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Persistent link: https://EconPapers.repec.org/RePEc:ctl:louvir:1998015

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