Working Paper

Hyperbolic Discounting and the Phillips Curve

Authors

  • Liam Graham
  • Dennis J. Snower
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.

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Info

JEL Classification
E20, E40, E50

Key Words

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