A search model of unemployment and inflation
By: by Etienne Lehmann
Series: Discussion paper -- no. 2194; Discussion paper (Forschungsinstitut zur Zukunft der Arbeit : Online) -- no. 2194
Publisher: IZA
Published: 2006
Place of publication: Bonn, Germany
Language: eng
Format: [electronic resource] /
Subjects: Unemployment; Inflation (Finance)
Description: "In this paper, I introduce money in the standard labor-matching model (Mortensen and Pissarides 1999, Pissarides 2000). A double coincidence problem makes Fiat Money necessary as a medium of exchange. In the long-run, a rise in the rate of money growth leads to higher inflation and higher unemployment, so the long-run Phillips curve is not vertical. The optimal monetary growth rate decreases with the workers' bargaining power, the level of unemployment benefits and the payroll tax rate"--Forschungsinstitut zur Zukunft der Arbeit web site.
Notes: Title from PDF file as viewed on 7/12/2006.

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