Working Paper

Hyperbolic Discounting and the Phillips Curve


  • Graham
  • L.
  • Snower
  • D.J.
Publication Date

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.

Kiel Institute Expert


JEL Classification
E20, E40, E50

Key Words

  • dynamic general equilibrium
  • Inflation
  • monetary policy
  • Nominal inertia
  • Phillips curve
  • Phillips-Kurve
  • unemployment