Working Paper Series
Bo Axell and Harald Lang
Is There a Long-Run Trade-Off between Inflation and Unemployment?
Abstract: How are inflation and unemployment related in the long
run? Are they negatively correlated, as in the so-called naive Phillips
curve theories or uncorrelated, "as in the neo-liberals' view or are they
positively correlated as Friedman suggested in his Nobel lecture?
this paper inflation is introduced into a general equilibrium search
unemployment model. We show that it is possible to get either a negatively
or a positively sloping long-run Phillips curve, all depending on the
source of inflation.
Keywords: Unemployment; inflation; Phillips curve; general equilibrium; (follow links to similar papers)
JEL-Codes: D50; E31; J64; (follow links to similar papers)
28 pages, December 1985
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