Long-Run Inflation-Unemployment Dynamics: The Spanish Phillips Curve and Economic Policy

Marika Karanassou (m.karanassou@qmul.ac.uk), Hector Sala and Dennis Snower

No 645, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: This paper takes a new look at the long-run dynamics of inflation and unemployment in response to permanent changes in the growth rate of the money supply. We examine the Phillips curve from the perspective of what we call “frictional growth”, i.e. the interaction between money growth and nominal frictions. After presenting theoretical models of this phenomenon, we construct an empirical model of the Spanish economy and, in this context, we evaluate the long-run inflation-unemployment tradeoff for Spain and examine how recent policy changes have affected it.

Keywords: staggered wage contracts; nominal inertia; Phillips curve; monetary policy; inflation-unemployment tradeoff; forward-looking expectations (search for similar items in EconPapers)
JEL-codes: E2 E3 E4 E5 J3 (search for similar items in EconPapers)
Pages: 42 pages
Date: 2002-11
New Economics Papers: this item is included in nep-ltv
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

Published - published in: Journal of Policy Modeling, 2008, 30 (2), 279-300

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Related works:
Journal Article: Long-run inflation-unemployment dynamics: The Spanish Phillips curve and economic policy (2008)
Working Paper: Long-run inflation-unemployment dynamics: The Spanish Phillips curve and economic policy (2008)
Working Paper: Long-run inflation-unemployment dynamics: The Spanish Phillips curve and economic policy (2008)
Working Paper: Long-run inflation-unemployment dynamics: The Spanish Phillips curve and economic policy (2007)
Working Paper: Long-Run Inflation-Unemployment Dynamics: The Spanish Phillips Curve and Economic Policy (2003)
Working Paper: Long-Run Inflation-Unemployment Dynamics: The Spanish Phillips Curve and Economic Policy (2002)
Working Paper: Long-run Inflation-Unemployment Dynamics: The Spanish Phillips Curve and Economic Policy (2002)
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