Long-Term Contracts, Rational Expectations, and the Optimal Money Supply Rule

The paper is concerned with the role of monetary policy and argues that activist monetary policy can affect the behavior of real output, rational expectations notwithstanding. A rational expectations model with overlapping labor contracts is constructed, with each labor contract being made for two p...

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Bibliographic Details
Published in:The Journal of political economy 1977-02, Vol.85 (1), p.191-205
Main Author: Fischer, Stanley
Format: Article
Language:English
Subjects:
Contracts
Economic expectations
Employment contracts
Monetary policy
Money supply
Nominal wages
Political economy
Price levels
Rational expectations theory
Wages
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