Real wages, monetary accommodation, and inflation
We 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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- Olivier J. Blanchard, 1985.
"The Wage Price Spiral,"
NBER Working Papers
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"Aggregate Dynamics and Staggered Contracts,"
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University of Chicago Press, vol. 88(1), pages 1-23, February.
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The Warwick Economics Research Paper Series (TWERPS)
64, University of Warwick, Department of Economics.
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- Rudiger Dornbusch & Mario Henrique Simonsen, 1987. "Inflation Stabilization with Incomes Policy Support: A Review of the Experience in Argentina, Brazil and Israel," NBER Working Papers 2153, National Bureau of Economic Research, Inc.
- Helpman, Elhanan & Leiderman, Leonardo, 1988. "Stabilization in high inflation countries: Analytical foundations and recent experience," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 28(1), pages 9-84, January.
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