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Hyperbolic Discounting and the Phillips Curve
Author(s) -
GRAHAM LIAM,
SNOWER DENNIS J.
Publication year - 2008
Publication title -
journal of money, credit and banking
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.763
H-Index - 108
eISSN - 1538-4616
pISSN - 0022-2879
DOI - 10.1111/j.1538-4616.2008.00120.x
Subject(s) - hyperbolic discounting , discounting , inflation (cosmology) , phillips curve , economics , mathematical economics , econometrics , mathematics , keynesian economics , physics , monetary policy , theoretical physics , finance
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.