TY - BOOK ID - 11277134 TI - The inflation-unemployment trade-off at low inflation AU - Benigno, Pierpaolo. AU - Ricci, Luca Antonio. PY - 2009 SN - 1451916175 1462366880 9786612842566 1451871813 1282842560 1452759154 PB - [Washington D.C.] : International Monetary Fund, DB - UniCat KW - Inflation (Finance). KW - Inflation. KW - Unemployment -- Effect of inflation on. KW - Unemployment KW - Inflation (Finance) KW - Effect of inflation on. KW - Inflation (Finance) and unemployment KW - Stagflation KW - Finance KW - Natural rate of unemployment KW - Stagnation (Economics) KW - Inflation KW - Labor KW - Price Level KW - Deflation KW - Wages, Compensation, and Labor Costs: General KW - Unemployment: Models, Duration, Incidence, and Job Search KW - Wage Level and Structure KW - Wage Differentials KW - Labour KW - income economics KW - Macroeconomics KW - Wages KW - Wage rigidity KW - Unemployment rate KW - Prices KW - United States UR - https://www.unicat.be/uniCat?func=search&query=sysid:11277134 AB - Wage setters take into account the future consequences of their current wage choices in the presence of downward nominal wage rigidities. Several interesting implications arise. First, a closed-form solution for a long-run Phillips curve relates average unemployment to average wage inflation; the curve is virtually vertical for high inflation rates but becomes flatter as inflation declines. Second, macroeconomic volatility shifts the Phillips curve outward, implying that stabilization policies can play an important role in shaping the trade-off. Third, nominal wages tend to be endogenously rigid also upward, at low inflation. Fourth, when inflation decreases, volatility of unemployment increases whereas the volatility of inflation decreases: this implies a long-run trade-off also between the volatility of unemployment and that of wage inflation. ER -