Increasing Returns to Scale and the Long-Run Phillips Curve

Authors

• Snower
• D.J.
• Vaona
• A.

Publication Date

JEL Classification

Key Words

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.

Kiel Institute Expert