The Real Effect of Money Growth in Dynamic General Equilibrium

Authors

• Graham
• L.
• Snower
• D.J.

Publication Date

JEL Classification

Key Words

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 microeconomic mechanisms that lead to this trade-off, and show that it remains even when the contract length is endogenised.

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