Working Paper

Increasing Returns to Scale and the Long-Run Phillips Curve

Kiel Working Papers, 1277

A growing body of empirical evidence shows that there exists a long-run positive tradeoff between inflation and real macroeconomic activity. Within a New Keynesian framewok, we examine how increasing returns generate a positive long-run relation between inflation and output.


Andrea Vaona


Publication Date
JEL Classification
E3, E20, E40, E50