Real wages, monetary accommodation, and inflation
AbstractWe analyze the dynamics of inflation in an economy characterized by a forward-looking, staggered, price and wage determination process, and by monetary accommodation. In our model, inflation reconciles the conflicting claims of workers and firms. The model is capable of generating a positive association between real wages and inflation, of the type that has been observed in some high-inflation countries. It generates a price-wage spiral but does not result in inflationary inertia.
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Bibliographic InfoArticle provided by Elsevier in its journal European Economic Review.
Volume (Year): 34 (1990)
Issue (Month): 5 (July)
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Web page: http://www.elsevier.com/locate/eer
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