Working Paper

Increasing Returns to Scale and the Long-Run Phillips Curve

Authors

  • Dennis J. Snower
  • Andrea Vaona
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.

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Info

JEL Classification
E3, E20, E40, E50

Key Words

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