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Hyperbolic Discounting and the Phillips Curve

Listed author(s):
  • Graham, Liam

    ()

    (University College London)

  • Snower, Dennis J.

    ()

    (Kiel Institute for the World Economy)

Using a standard dynamic general equilibrium model, we show that the interaction of staggered nominal contracts with hyperbolic discounting leads to inflation having significant long-run effects on real variables.

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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 3477.

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Length: 32 pages
Date of creation: Apr 2008
Handle: RePEc:iza:izadps:dp3477
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