@article{Perspective:1605,
      recid = {1605},
      author = {Amano, Robert and Carter, Thomas J. and Moran, Kevin},
      title = {Inflation and Growth: A New Keynesian Perspective},
      address = {2012},
      pages = {1 online resource (iii, 23 pages, figures)},
      abstract = {The long-run relation between growth and inflation has not  yet been studied in the context of nominal price and wage  rigidities, despite the fact that these rigidities now  figure prominently in workhorse macroeconomic models. We  therefore integrate staggered price- and wage-setting into  an endogenous growth framework. In this setting, growth and  inflation are linked via the incentive to innovate. For  standard calibrations, the linkage is strong: as trend  inflation shifts from –5 to 5 percent, the range over which  the economy’s steady-state growth rate varies spans 50  basis points, implying up to a 15 percent output  differential after thirty years. Nominal wage rigidity  plays a critical role in generating these results, and  compounding of inflation’s growth effects implies large  welfare losses. Endogenous growth thus proves a key channel  via which inflation impacts New Keynesian economies.},
      url = {http://www.oar-rao.bank-banque-canada.ca/record/1605},
      doi = {https://doi.org/10.34989/swp-2012-23},
}