On the employment, investment and current account effects of inflation

• 成果类型: Article
• 署名作者: Mansoorian, Arman; Mohsin, Mohammed
• 署名单位: York University - Canada; University of Tennessee System; University of Tennessee Knoxville
• 刊物名称: JOURNAL OF INTERNATIONAL ECONOMICS
• ISSN/ISSBN: 0022-1996
• DOI: 10.1016/j.jinteco.2005.12.003
• 发表日期: 2006
• 页码: 296-313
• 关键词: employment; INVESTMENT; current account; inflation; Cash-in-advance

摘要

The effects of inflation targets are examined for a small open economy with cash in advance constraints. An increase in the inflation rate, by increasing the price of consumption relative to leisure, reduces consumption and labor supply. The fall in labor reduces the marginal productivity of capital, and a fall in investment. The country runs a current account surplus, despite the fall in output. The dynamics of the model for permanent and temporary policy changes are fully worked out, with the aid of a diagrammatic apparatus. Quantitative analysis of the model reveals substantial impact and steady state effects. (c) 2006 Elsevier B.V. All rights reserved.