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Working Paper

Hyperbolic Discounting and the Phillips Curve

Kiel Working Papers, 1346
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Authors

  • Graham
  • L.
  • Snower
  • D.J.

Publication Date

JEL Classification

E20 E40 E50

Key Words

dynamic general equilibrium

Inflation

monetary policy

Nominal inertia

Phillips curve

Phillips-Kurve

unemployment

Using a standard dynamic general equilibrium model, we show that the interaction of staggered nominal contracts with hyperbolic discounting leads to inflation having significant long-run effects on real variables.

Kiel Institute Expert

  • Prof. Dennis J. Snower, Ph.D.
    President Emeritus

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