Incomplete Markets and the Output-inflation Tradeoff

Abstract : This paper analyses the effects of money shocks on macroeconomic aggregates in a flexible-price, incomplete-markets environment that generates persistent wealth inequalities amongst agents. In this framework, unexpected money shocks redistribute wealth from the cash-rich employed to the cash-poor unemployed, and induce the former to increase their labour supply in order to maintain their desired levels of consumption and precautionary savings. The reduced-form dynamics of the model is a textbook "output-inflation tradeoff" equation whereby inflation shocks raise current output. The attenuating role of mean inflation and money growth persistence on this non-neutrality tradeoff, as well as some of the welfare implications of wealth redistribution, are also examined.
Type de document :
Pré-publication, Document de travail
2008
Liste complète des métadonnées

Littérature citée [17 références]  Voir  Masquer  Télécharger

https://hal-sciencespo.archives-ouvertes.fr/hal-01066163
Contributeur : Spire Sciences Po Institutional Repository <>
Soumis le : vendredi 19 septembre 2014 - 12:05:57
Dernière modification le : jeudi 23 mars 2017 - 09:57:27
Document(s) archivé(s) le : samedi 20 décembre 2014 - 11:20:22

Fichier

wp200645.pdf
Accord explicite pour ce dépôt

Identifiants

  • HAL Id : hal-01066163, version 1
  • SCIENCESPO : 2441/8881

Collections

Citation

Yann Algan, Edouard Challe, Xavier Ragot. Incomplete Markets and the Output-inflation Tradeoff. 2008. 〈hal-01066163〉

Partager

Métriques

Consultations de la notice

116

Téléchargements de fichiers

103