文档介绍：The Short-Run Tradeoff between Inflation and Unemployment
Chapter 33
Unemployment and Inflation
The natural rate of unemployment depends on various features of the labor market.
Examples include minimum-wage laws, the market power of unions, the role of efficiency wages, and the effectiveness of job search.
Unemployment and Inflation
The inflation rate depends primarily on growth in the quantity of money, controlled by the Fed.
The misery index, one measure of the “health” of the economy, adds together the inflation rate and unemployment rate.
Unemployment and Inflation
Society faces a short-run tradeoff between unemployment and inflation.
If policymakers expand aggregate demand, they can lower unemployment, but only at the cost of higher inflation.
If they contract aggregate demand, they can lower inflation, but at the cost of temporarily higher unemployment.
The Phillips Curve
The Phillips curve illustrates the short-run relationship between inflation and unemployment.
The Phillips Curve...
Unemployment Rate (percent)
0
Inflation Rate (percent per year)
4
B
6
A
7
2
Phillips curve
Aggregate Demand, Aggregate Supply, and the Phillips Curve
The Phillips curve shows the short-binations of unemployment and inflation that arise as shifts in the aggregate demand curve move the economy along the short-run aggregate supply curve.
Aggregate Demand, Aggregate Supply, and the Phillips Curve
The greater the aggregate demand for goods and services, the greater is the economy’s output, and the higher is the overall price level.
A higher level of output results in a lower level of unemployment.
How the Phillips Curve is Related to the Model of Aggregate Demand and Aggregate Supply...
Phillips curve
0
(b) The Phillips Curve
Inflation Rate (percent per year)
Unemployment Rate (percent)
0
(a) The Model of AD and AS
Price Level
Low AD
High AD
B
4
6
(output is 8,000)
A
7
2
(output is 7,500)
A
7,500
102
(unemployment is 7%)
B
8,000
10