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Journal article
Liam Graham ,
Dennis Snower

Hyperbolic Discounting and the Phillips Curve

  • Abstract
    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.

  • Keywords

    inflation, unemployment, Phillips curve, nominal inertia, monetary policy, dynamic general equilibrium

  • JEL classification

    E20, E40, E50

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