Abstract
The theory of Chapter 2 explains domestically-produced output, domestic prices and the overall price level in terms of foreign prices, money, the exchange rate and other impulses. The central feature of the theory is the Lucas supply of output extended to an open economy which incorporates, in addition to inflation-rate misperceptions, terms-of-trade effects, the ‘tax wedge’ and wage indexation.
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© 1985 Paul De Grauwe, Michele Fratianni and Mustapha K. Nabli
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De Grauwe, P., Fratianni, M., Nabli, M.K. (1985). Supply of Output and Inflation in EC Countries. In: Exchange Rates, Money and Output. Palgrave Macmillan, London. https://doi.org/10.1007/978-1-349-17699-1_3
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DOI: https://doi.org/10.1007/978-1-349-17699-1_3
Publisher Name: Palgrave Macmillan, London
Print ISBN: 978-1-349-17701-1
Online ISBN: 978-1-349-17699-1
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