Publication
May 2006
This paper examines the long-run positive tradeoff between inflation and real macroeconomic activity. The authors discuss how increasing returns generate a positive long-run relation between inflation and output. They find that the tradeoff depends on the techniques available to firms. Increasing returns imply a positive relation between macroeconomic activity and money growth whereas diminishing returns imply a negative relation.
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English (PDF, 10 pages, 162 KB) |
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Author | Andrea Vaona, Dennis J Snower |
Series | Kiel Institute Working Papers |
Issue | 1277 |
Publisher | Kiel Institute for the World Economy |
Copyright | © 2006 Kiel Institute for the World Economy |