Starting on a Phillips curve with expected inflation equal to 5% and unemployment at its natural rate, show what happens to unemployment if the Fed tries to reduce inflation, but has no credibility
As time passes and people realize that the inflation rate is now lower, what happens to the short-run Phillips curve?
The unemployment rate rises as the economy moves along the Phillips curve and as inflation declines. As time passes, inflation expectations begin to decline, shifting the Phillips curve down and to the left until the unemployment rate returns to its natural rate and inflation and expected inflation are equal at a lower level.
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In countries that have a high degree of employment protection as measured by the World Bank's Rigidity of Employment Index, approximately ________ of jobless workers have been employed for more than one year
A) 5% B) 16% C) 27% D) 43%
All of the following are included in gross private domestic investment expenditure EXCEPT a
A) business's purchase of a fleet of cars. B) household's purchase of a new house. C) business's purchase of another company's stock. D) a retail store's purchase of shoes to add to its inventory.