Credit conditions, inflation, and unemployment / Chao Gu, Janet Hua Jiang, Liang Wang.: FB3-5/2025-26E-PDF
"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.
Permanent link to this Catalogue record:
publications.gc.ca/pub?id=9.956729&sl=0
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| Title | Credit conditions, inflation, and unemployment / Chao Gu, Janet Hua Jiang, Liang Wang. |
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| Publication type | Monograph - View Master Record |
| Language | [English] |
| Format | Digital text |
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| Description | 1 online resource (ii, 61 pages) : charts. |
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