00000nam 2200000zi 4500 9.956729 CaOODSP 20251027131316 m o d f cr |n||||||||| 251027t20252025oncd ob f000 0 eng d CaOODSP eng rda CaOODSP eng eng fre n-us--- FB3-5/2025-26E-PDF Gu, Chao, author. Credit conditions, inflation, and unemployment / Chao Gu, Janet Hua Jiang, Liang Wang. [Ottawa] : Bank of Canada = Banque du Canada, 2025. ©2025 1 online resource (ii, 61 pages) : charts. text txt rdacontent computer c rdamedia online resource cr rdacarrier Staff working paper = Document de travail du personnel, 1701-9397 ; 2025-26 "Last updated: September 19, 2025." Includes bibliographical references (pages 37-42). "We construct a New Monetarist model with labor market search and identify two channels that affect the long-term relationship between inflation and unemployment. First, inflation lowers wages through bargaining because unemployed workers rely more heavily on cash transactions and suffer more from inflation than employed workers: this wage-bargaining channel generates a downward Phillips curve without assuming nominal rigidity. Second, inflation increases the firm’s financing costs, which discourages job creation and increases unemployment; this cash-financing channel leads to an upward-sloping Phillips curve. We calibrate our model to the U.S. economy. The improvement in firm financing conditions can explain the observation that the slope of the long-run Phillips curve has switched from positive to negative post-2000"--Abstract, page ii. Includes abstracts in English and French. Inflation (Finance) United States Econometric models. Unemployment United States Econometric models. Credit United States Econometric models. Inflation États-Unis Modèles économétriques. Chômage États-Unis Modèles économétriques. Crédit États-Unis Modèles économétriques. Bank of Canada, issuing body. Staff working paper (Bank of Canada) 2025-26. (CaOODSP)9.806221 PDF 1.43 MB https://publications.gc.ca/collections/collection_2025/banque-bank-canada/FB3-5-2025-26-eng.pdf