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Hyperbolic discounting and the Phillips curve

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  • Graham, Liam
  • Snower, Dennis J.

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 e¤ects on real variables.

Suggested Citation

  • Graham, Liam & Snower, Dennis J., 2007. "Hyperbolic discounting and the Phillips curve," Kiel Working Papers 1346, Kiel Institute for the World Economy (IfW Kiel).
    • Handle: RePEc:zbw:ifwkwp:1346
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    More about this item

    Keywords

    Unemployment; Phillips curve; Monetary policy; Dynamic general equilibrium; Nominal inertia; Inflation;
    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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