Liam Graham ,
Hyperbolic Discounting and the Phillips Curve
AbstractUsing 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.
Keywordsinflation, unemployment, Phillips curve, nominal inertia, monetary policy, dynamic general equilibrium
JEL classificationE20, E40, E50