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I think it will help to fill in some of the missing causal elements in this picture. Suppose a classical economy at equilibrium, and understanding "growth" as growth in nominal GDP, When growth and inflation are primarily driven by aggregate demand... All else equal, a positive demand shock (rightward shift) leads to higher consumption (growth) and ...


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When growth and inflation are primarily driven by aggregate demand, nominal bond returns tend to be negatively correlated with growth Actually, the above sentence is the explicited version of what you have in mind, i.e. the links between nominal (vs real) returns, (demand-driven) inflation and growth. when growth and inflation are primarily driven by ...


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