Supply Shocks and Monetary Policy Revisited

@article{Gordon1984SupplySA,
  title={Supply Shocks and Monetary Policy Revisited},
  author={Robert J. Gordon},
  journal={ERN: Monetary Policy Objectives; Policy Designs; Policy Coordination (Topic)},
  year={1984}
}
  • R. Gordon
  • Published 1 March 1984
  • Economics
  • ERN: Monetary Policy Objectives; Policy Designs; Policy Coordination (Topic)
This paper reviews the main issues that supply shocks pose for the conduct of monetary policy. A simple version of the Gordon-Phelps model shows that the necessary condition for actual real GNP to be maintained at its equilibrium level in the wake of a supply shock is for the change innominal GNP to exceed the change in the nominal wage by the change in the income share of the raw material in GNP. The required "wedge" between nominal GNP and wage growth can be accomplished by any combination of… 
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  • R. Gordon
  • Economics
    The Journal of Law and Economics
  • 1975
ECONOMIC research on the causes of inflation has been primarily devoted to the theoretical and empirical study of the links between government policy variables and the rate of inflation. While debate
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