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Modeling the dynamics of inflation compensation

โœ Scribed by Markus Jochmann; Gary Koop; Simon M. Potter


Book ID
116641719
Publisher
Elsevier Science
Year
2010
Tongue
English
Weight
574 KB
Volume
17
Category
Article
ISSN
0927-5398

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We discuss a fully dynamical microeconomic model where inflation appears as the response of an unstable system to stochastic noise and/or time discretisation of the dynamics. In the model economic agents fix prices and production volumes following simple, robust, suboptimal rules. A global parameter