A Revised Tobin Effect from Inflation: Relative Input Price and Capital Ratio Realignments, USA and UK, 1959–1999

Gillman, Max and Nakov, A 2003. A Revised Tobin Effect from Inflation: Relative Input Price and Capital Ratio Realignments, USA and UK, 1959–1999. Economica 70 (279) , pp. 439-450. 10.1111/1468-0335.t01-1-00292

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Abstract

The paper studies the realignments induced by inflation within an endogenous growth monetary economy. Accelerating inflation raises the ratio of the real wage to the real interest rate, and so raises the use of physical capital relative to human capital across all sectors. We find cointegration evidence for the US and UK economies consistent with a general equilibrium, Tobin-type, effect of inflation on input prices and capital intensity, even while the growth rate of output is reduced by inflation.

Item Type:	Article
Date Type:	Publication
Status:	Published
Schools:	Business (Including Economics)
Publisher:	Wiley-Blackwell
ISSN:	1468-0335
Last Modified:	22 Mar 2023 13:36
URI:	https://orca.cardiff.ac.uk/id/eprint/2533

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