Incomplete markets and the output–inflation tradeoff

Abstract : This paper analyses the effects of money shocks on macroeconomic aggregates in a tractable flexible-price, incomplete-markets environment that generates persistent wealth inequalities amongst agents. In this framework, current inflation 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. If the shocks are persistent, however, they also raise inflation expectations and thus deter the employed from saving and supplying labour. We relate the strength of these two inflation taxes to the underlying parameters of the model and study how they compete in determining the overall sign and slope of the implied ‘output–inflation tradeoff’ relation.
Type de document :
Article dans une revue
Economic Theory, 2011, 46 (1), pp.55-84. 〈10.1007/s00199-009-0499-0〉
Liste complète des métadonnées

Littérature citée [19 références]  Voir  Masquer  Télécharger

https://hal-sciencespo.archives-ouvertes.fr/hal-01169657
Contributeur : Spire Sciences Po Institutional Repository <>
Soumis le : lundi 29 juin 2015 - 23:32:20
Dernière modification le : mardi 11 octobre 2016 - 14:11:04
Document(s) archivé(s) le : mardi 25 avril 2017 - 20:01:20

Fichier

tradeofffinal.pdf
Fichiers produits par l'(les) auteur(s)

Identifiants

Collections

Citation

Yann Algan, Edouard Challe, Xavier Ragot. Incomplete markets and the output–inflation tradeoff. Economic Theory, 2011, 46 (1), pp.55-84. 〈10.1007/s00199-009-0499-0〉. 〈hal-01169657〉

Partager

Métriques

Consultations de la notice

304

Téléchargements de fichiers

103