Money disillusion and stagflation

Campbell, H. F. and Dorenfeld, D. L. (1979) Money disillusion and stagflation. Journal of Macroeconomics, 1 1: 131-139.

Author Campbell, H. F.
Dorenfeld, D. L.
Title Money disillusion and stagflation
Journal name Journal of Macroeconomics   Check publisher's open access policy
ISSN 0164-0704
Publication date 1979
Sub-type Article (original research)
Volume 1
Issue 1
Start page 131
End page 139
Total pages 9
Place of publication Amsterdam, Netherlands
Publisher Elsevier
Language eng
Abstract In the conventional income-expenditure model with rigid wages, the aggregate supply curve is upward sloping. Increases in demand therefore imply increases in real output and employment. We demonstrate here that this conclusion depends on the form of money illusion implied by the rigid wage assumption. If we assume instead that labor supply is more sensitive to price increases than to wage increases, the aggregate supply curve is negatively sloped, and the conventional policy multipliers are thereby reversed. In the second section, we show that this result also follows if labor supply depends on the expected real wage.
Q-Index Code C1
Q-Index Status Provisional Code
Institutional Status Non-UQ

Document type: Journal Article
Sub-type: Article (original research)
Collection: School of Economics Publications
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Created: Thu, 27 Jun 2013, 09:52:51 EST by Harry Campbell on behalf of School of Economics