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Hyperbolic Discounting and the Phillips Curve

Author

Listed:
  • Graham, Liam

    (University College London)

  • Snower, Dennis J.

    (Hertie School of Governance)

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.

Suggested Citation

  • Graham, Liam & Snower, Dennis J., 2008. "Hyperbolic Discounting and the Phillips Curve," IZA Discussion Papers 3477, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp3477
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    More about this item

    Keywords

    inflation; unemployment; Phillips curve; nominal inertia; monetary policy; dynamic general equilibrium;
    All these keywords.

    JEL classification:

    • E20 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - General (includes Measurement and Data)
    • E40 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - General
    • E50 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - General

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