TY - JOUR
T1 - Real wages, monetary accommodation, and inflation
AU - Helpman, Elhanan
AU - Leiderman, Leonardo
N1 - Funding Information:
*An earlier version of this paper, under the title ‘Wages, Prices, and Inflationary Inertia,’ was presented at the Caesarea conference on The Theory of Dynamic Price Setting Market Structure and Macro Implications, May 1987. We thank Olivicr Blanchard, Allan Drazen, Joseph Zeira and two referees for comments, and the Horowitz Institute for financial support.
PY - 1990/7
Y1 - 1990/7
N2 - We analyze the dynamics of inflation in an economy characterized by a forward-looking, staggered, price and wage determination process, and by monetary accommodation. In our model, inflation reconciles the conflicting claims of workers and firms. The model is capable of generating a positive association between real wages and inflation, of the type that has been observed in some high-inflation countries. It generates a price-wage spiral but does not result in inflationary inertia.
AB - We analyze the dynamics of inflation in an economy characterized by a forward-looking, staggered, price and wage determination process, and by monetary accommodation. In our model, inflation reconciles the conflicting claims of workers and firms. The model is capable of generating a positive association between real wages and inflation, of the type that has been observed in some high-inflation countries. It generates a price-wage spiral but does not result in inflationary inertia.
UR - http://www.scopus.com/inward/record.url?scp=0025591197&partnerID=8YFLogxK
U2 - 10.1016/0014-2921(90)90013-O
DO - 10.1016/0014-2921(90)90013-O
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AN - SCOPUS:0025591197
SN - 0014-2921
VL - 34
SP - 897
EP - 911
JO - European Economic Review
JF - European Economic Review
IS - 5
ER -