Journal Article

Increasing Returns to Scale and the Long-Run Phillips Curve


  • Snower
  • D.J.
  • Vaona
  • A.
Publication Date

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.

Kiel Institute Expert


JEL Classification
E3, E20, E40, E50

Key Words

  • Increasing returns
  • Inflation
  • monetary policy
  • Nominal inertia
  • Phillips curve
  • Phillips-Kurve