文档介绍：Philips curve
short-run Philips curve
There is a stable trade-off between unemployment and inflation.
Inflation rate(%)
Unemployment rate(%)
2. Adaptive expectations theory (适应性预期理论)
Inflation rate(%)
Unemployment rate(%)
e1
e2
e3
2. Adaptive expectations theory (适应性预期理论)
There is no long-run trade-off between inflation and unemployment; the long-run Philips curve is vertical, and expansionary policies will generate inflation rather than lower unemployment.
Unemployment rate(%)
Inflation rate(%)
e1
e2
e3
Restrictive policies may reduce inflation without permanently increasing unemployment.
3. Rational expectations theory (理性预期理论)
Inflation rate(%)
PC
Unemployment rate(%)
Macroeconomics policy is ineffective because it is anticipated by workers.
Demand-pull inflation
Demand-pull inflation occurs when an increase in aggregate demand pulls up the price level.
ASSR
e1
e2
Real output
Price level
P1
P2
AD
Demand-pull inflation
In short run, demand-pull inflation will drive up the price level and increase real output; in the long-run, only the price level will rise.
Real output
ASSR
e1
e2
Price level
P1
P2
ASLR
e3
P3
AD
Cost-push inflation
Shift the aggregate supply leftwards
Real output
ASSR
e1
e2
Price level
P1
P2
AD
(1) If government attempts to maintain full employment under conditions of cost-push inflation, an inflationary spiral is likely to result. (2)If government takes a hands-off approach to cost-push inflation, a recession will occur.
Exercises