EconPapers    
Economics at your fingertips  
 

The Evolution of Inflation and Unemployment: Explaining the Roaring Nineties

Marika Karanassou, Hector Sala and Dennis J. Snower
Additional contact information
Marika Karanassou: Queen Mary, University of London and IZA
Dennis J. Snower: Kiel Institute for the World Economy, Christian-Albrechts-University of Kiel and CEPR

No 604, Working Papers from Queen Mary University of London, School of Economics and Finance

Abstract: This paper analyses the relation between US inflation and unemployment from the perspective of "frictional growth," a phenomenon arising from the interplay between growth and frictions. In particular, we examine the interaction between money growth (on the one hand) and various real and nominal frictions (on the other). In this context we show that monetary policy has not only persistent, but permanent real effects, giving rise to a long-run inflation-unemployment tradeoff. We evaluate this tradeoff empirically and assess the impact of productivity, money growth, budget deficit, and trade deficit on the US unemployment and inflation trajectories during the nineties.

Keywords: Inflation dynamics; Unemployment dynamics; Phillips curve; Roaring nineties (search for similar items in EconPapers)
JEL-codes: E24 E31 E51 E62 (search for similar items in EconPapers)
Date: 2007-07-01
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
https://www.qmul.ac.uk/sef/media/econ/research/wor ... 2007/items/wp604.pdf (application/pdf)

Related works:
Journal Article: THE EVOLUTION OF INFLATION AND UNEMPLOYMENT: EXPLAINING THE ROARING NINETIES (2008) Downloads
Working Paper: The Evolution of Inflation and Unemployment: Explaining the Roaring Nineties (2007) Downloads
Working Paper: The evolution of inflation and unemployment: Explaining the roaring nineties (2007) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:qmw:qmwecw:604

Access Statistics for this paper

More papers in Working Papers from Queen Mary University of London, School of Economics and Finance Contact information at EDIRC.
Bibliographic data for series maintained by Nicholas Owen ( this e-mail address is bad, please contact ).

 
Page updated 2025-03-31
Handle: RePEc:qmw:qmwecw:604