Simonsen, Mario Henrique (1935–1997)
The Brazilian economic theorist and policymaker Mario Henrique Simonsen elaborated in the early 1970s a theory of inertial inflation based on the indexation of economic contracts. He later established that lagged indexation under rational expectations brings about a trade-off between inflation and unemployment. Simonsen further argued that incomes policy may be deployed to speed up the convergence to Nash equilibria. Simonsen also showed that the condition for a country’s solvency is that the rate of growth of its exports exceeds the rate of interest, advanced a model of bargaining between banks and indebted developing countries, and formulated a cash-in-advance model.
KeywordsBargaining Cash-in-advance models Dornbusch, R Dual economies Friedman, M Game theory Incomes policies Inertial inflation Inflation Inflationary expectations Inflation–unemployment trade-off Kuhn–Tucker theorem Money-in-utility function Nonlinear programming Price indexation Risk aversion Simonsen curve Simonsen, M. H Sovereign debt Staggered wages Structural unemployment Wage indexation Wage rigidities
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