EconomicsSeminar（2019-19）

Topic: Heterogeneity, Decentralized Trade, and the Long-run Real Effects of Inflation

Speaker: Tao Zhu, the HKUST

Time: Tuesday,Nov. 19, 13:30-15:00

Location: Room 217, GuanghuaBuilding 2

Abstract: 

The long-run relationship between inflation and output is studied in a standard matching model. Thesign and degree of the output-inflation correlation depends on the cause of inflation and, more specifically, on how inflation redistributes wealth. The correlation may be negative and weak and may be positive and strong. The strong and positive output effect can be compatible with a steep andpositively sloped Phillps curve and with a violation of the Fisher condition. When the output effect ispositive and strong, it is not exploitable in that inflation does not improve welfare. But policy may bechose in a way that inflation improves both output and welfare and there is some base for such a policyto be adopted by policy makers.

Introduction:

Your participation is warmly welcomed!