Money, Human Capital, and Business Cycles: A Modern Phillips Curve-Style Tradeoff

K-J Matheny

Purdue University Economics Working Papers from Purdue University, Department of Economics

Abstract: Growth mechanisms can significantly affect short run properties of monetary models. An equilibrium model with human capital accumulation through a learning-by-doing mechanism possesses both sustained inflation rigidity and persistent real responses in the presence of unexpected monetary shocks. The model possesses short and long run inflation-employment tradeoffs that are reminiscent of natural rate models.

Keywords: MONETARY POLICY; HUMAN CAPITAL; BUSINESS CYCLES; INFLATION (search for similar items in EconPapers)
JEL-codes: E31 E32 E52 J21 O4 (search for similar items in EconPapers)
Pages: 30 pages
Date: 1996
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Persistent link: https://EconPapers.repec.org/RePEc:pur:prukra:1091

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