TY  - JOUR
AU  - Helpman,Elhanan
AU  - Leiderman,Leonardo
TI  - Real Wages, Monetary Accommodation, and Inflation
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 3146
PY  - 1990
Y2  - October 1990
UR  - http://www.nber.org/papers/w3146
L1  - http://www.nber.org/papers/w3146.pdf
N1  - Author contact info:
Elhanan Helpman
Department of Economics
Harvard University
1875 Cambridge Street
Cambridge, MA 02138
Tel: 617-495-4690
Fax: 617-495-7730
E-Mail: ehelpman@harvard.edu

Leonardo Leiderman
Department of Economics
Tel-Aviv University
Ramat Aviv  69978
ISRAEL
E-Mail: leoleid@post.tau.ac.il
AB  - We analyze the dynamics of inflation in an economy characterized by a forward-looking, staggered, price and wage determination process, and by monetary accommodation. In our model, inflation reconciles the conflicting claims of workers and firms. The model is capable of generating a positive association between real wages and inflation, of the type that has been observed in some high-inflation countries. It generates a  price-wage spiral but does not result in inflationary inertia.
ER  -