This paper offers a reappraisal of the inflation–unemployment tradeoff, based on frictional growth, describing the interplay between nominal frictions and money growth. When the money supply grows in the presence of price inertia (due to staggered...

Inflation has been persistently below the inflation target of the ECB despite the ongoing economic recovery in the euro area. In this paper, we analyse whether the relationship between inflation and economic activity in the euro area has changed...

In this paper we empirically investigate the time- and state-dependent behavior of aggregate price setting. We implement a testing procedure by means of a nonparametric representation of the structural form New Keynesian Phillips curve. By means of...

Kiel Policy Brief No. 57: In the aftermath of the financial crisis of 2007–2008 policymakers became concerned about a slowdown of potential growth. In his Kiel Policy Brief Mewael F. Tesfaselassie discusses monetary policy response to potential...

The paper reexamines the long-run Phillips curve in a New Keynesian model with job turnover and trend productivity growth. It shows that (i) job turnover flattens the long-run Phillips curve (a permanent change in the money growth rate has a...

This paper extends the efficiency wages/partially adaptive expectations Phillips curve, otherwise known as the price-price Phillips curve, from a closed economy context to an open economy one with both commodity trade and capital mobility. We also...

The New Keynesian Phillips curve (NKPC) is now the dominant model of inflation dynamics. In recent years, a large body of empirical research has documented price-setting behaviour at the individual level, allowing the assessment of the...

We analyse the effects of money growth within a standard New Keynesian framework and show that the interaction between staggered nominal contracts and money growth leads to a long-run trade-off between output and money growth. We explore the...

This paper analyses the relation between US inflation and unemployment from the perspective of "frictional growth," a phenomenon arising from the interplay between growth and frictions. In particular, we focus on the interaction between money growth...

This paper analyses the relation between US inflation and unemployment from the perspective of "frictional growth," a phenomenon arising from the interplay between growth and frictions. In particular, we focus on the interaction between money growth...