the political economy of inflation, labour market distortions and
... We argue that the origin of these two problems lies in the assumption that policy makers have an ambitious employment target that exceeds the natural rate level of employment. The usual justification is that they are concerned with social welfare and that equilibrium employment is too low from a soc ...
... We argue that the origin of these two problems lies in the assumption that policy makers have an ambitious employment target that exceeds the natural rate level of employment. The usual justification is that they are concerned with social welfare and that equilibrium employment is too low from a soc ...
The unemployment rate is the number of people actively looking for
... cases. For example, in some months, a falling unemployment rate was accompanied by a slight fall in employment. How can the number of individuals employed fall and the unemployment rate fall at the same time? This must mean that the number of individuals unemployed fell also. Most likely, what has h ...
... cases. For example, in some months, a falling unemployment rate was accompanied by a slight fall in employment. How can the number of individuals employed fall and the unemployment rate fall at the same time? This must mean that the number of individuals unemployed fell also. Most likely, what has h ...
The interaction of aggregate-demand policies and
... For our simple model, the impact of policies under (1) and (4) is most obviously on the shape and location of the wage-setting schedule, so that reductions in unemployment benefits, minimum wages or the bargaining strength of unions will all shift the wage-setting schedule down. Policies under (2) a ...
... For our simple model, the impact of policies under (1) and (4) is most obviously on the shape and location of the wage-setting schedule, so that reductions in unemployment benefits, minimum wages or the bargaining strength of unions will all shift the wage-setting schedule down. Policies under (2) a ...
This PDF is a selection from an out-of-print volume from... of Economic Research
... cycles that make them so intriguing an objt~ct for economists to study, and yet so elusive a phenomenon to capture in a simple economic model. First, the economy spends most of its time in recessions, recoveries, or expansions rather than in the steady-state condition of "full-employment equilibrium ...
... cycles that make them so intriguing an objt~ct for economists to study, and yet so elusive a phenomenon to capture in a simple economic model. First, the economy spends most of its time in recessions, recoveries, or expansions rather than in the steady-state condition of "full-employment equilibrium ...
9 Revision – Unemployment
... 1. Real-wage (classical) unemployment occurs when trade unions push wages above the market-clearing level, or when the government introduces a minimum wage that is above the market-clearing level. This is ab in the diagram above. 2. Demand-deficient (cyclical/Keynesian) unemployment is where unemp ...
... 1. Real-wage (classical) unemployment occurs when trade unions push wages above the market-clearing level, or when the government introduces a minimum wage that is above the market-clearing level. This is ab in the diagram above. 2. Demand-deficient (cyclical/Keynesian) unemployment is where unemp ...
a dual mandate for the federal reserve: the pursuit of price stability
... The declines in interest-sensitive sectors reduced economic activity more generally, causing inflation to fall and unemployment to soar. Between 1979 and 1982, trend annual inflation declined 8 percentage points [Ball, 1994]. As Figure 2 shows, between the fall of 1979 and the end of 1982, aggregate ...
... The declines in interest-sensitive sectors reduced economic activity more generally, causing inflation to fall and unemployment to soar. Between 1979 and 1982, trend annual inflation declined 8 percentage points [Ball, 1994]. As Figure 2 shows, between the fall of 1979 and the end of 1982, aggregate ...
Public Policy Brief 71 - Levy Economics Institute of Bard College
... it is helpful and pertinent to make a number of relevant observations. The first is that the channels of monetary transmission are not mutually exclusive, in that the overall response of the economy to changes in monetary policy incorporates the combined effects of all the channels. This concurrent ...
... it is helpful and pertinent to make a number of relevant observations. The first is that the channels of monetary transmission are not mutually exclusive, in that the overall response of the economy to changes in monetary policy incorporates the combined effects of all the channels. This concurrent ...
NBER WORKING PAPER SERIES A JOBLESS RECOVERY
... inundated by liquidity, a fall in interest rates has no longer a stimulating effect on aggregate demand. The experience of Japan in the past two decades as well as the recent economic performance of the United States and other developed countries seems to suggest that zero nominal interest rates ar ...
... inundated by liquidity, a fall in interest rates has no longer a stimulating effect on aggregate demand. The experience of Japan in the past two decades as well as the recent economic performance of the United States and other developed countries seems to suggest that zero nominal interest rates ar ...
NBER WORKING PAPER SERIES DOES STABILIZING INFLATION CONTRIBUTE TO STABILIZING ECONOMIC ACTIVITY?
... stabilized appreciably. Many factors were likely at work, but this experience suggests that inflation stabilization does not have to come at the cost of greater volatility of real activity; in fact, it suggests that, by anchoring inflation expectations, low and stable inflation is an important preco ...
... stabilized appreciably. Many factors were likely at work, but this experience suggests that inflation stabilization does not have to come at the cost of greater volatility of real activity; in fact, it suggests that, by anchoring inflation expectations, low and stable inflation is an important preco ...
Ch 7
... • Dow Jones & Company recently began reporting an Economic Sentiment Index (ESI) that gauges the degree of optimism about the economy as gleaned from economic new articles in 15 major U.S. newspapers. • Dow Jones contends that the ESI predicts future economic performance and other leading economic i ...
... • Dow Jones & Company recently began reporting an Economic Sentiment Index (ESI) that gauges the degree of optimism about the economy as gleaned from economic new articles in 15 major U.S. newspapers. • Dow Jones contends that the ESI predicts future economic performance and other leading economic i ...
Phillips Curve - Webarchiv ETHZ / Webarchive ETH
... changes in expectations. • The short-run Phillips curve also shifts because of shocks to aggregate supply. • Adverse changes in aggregate supply can worsen the short-run trade-off between unemployment and inflation. • An adverse supply shock gives policymakers a less favorable trade-off between infl ...
... changes in expectations. • The short-run Phillips curve also shifts because of shocks to aggregate supply. • Adverse changes in aggregate supply can worsen the short-run trade-off between unemployment and inflation. • An adverse supply shock gives policymakers a less favorable trade-off between infl ...
Inflation Cycles
... But other sources might be international disturbances, climate fluctuations, or natural disasters. We’ll explore RBC theory by looking first at its impulse and then at the mechanism that converts that impulse into a cycle in real GDP. ...
... But other sources might be international disturbances, climate fluctuations, or natural disasters. We’ll explore RBC theory by looking first at its impulse and then at the mechanism that converts that impulse into a cycle in real GDP. ...
Edmund Phelps
Edmund Strother Phelps, Jr. (born July 26, 1933) is an American economist and the winner of the 2006 Nobel Memorial Prize in Economic Sciences. Early in his career he became renowned for his research at Yale's Cowles Foundation in the first half of the 1960s on the sources of economic growth. His demonstration of the Golden Rule savings rate, a concept first devised by John von Neumann and Maurice Allais, started a wave of research on how much a nation ought to spend on present consumption rather than save and invest for future generations. His most seminal work inserted a microfoundation—one featuring imperfect information, incomplete knowledge and expectations about wages and prices—to support a macroeconomic theory of employment determination and price-wage dynamics. This led to his development of the natural rate of unemployment—its existence and the mechanism governing its size.Phelps has been McVickar Professor of Political Economy at Columbia University since 1982. He is also the director of Columbia's Center on Capitalism and Society.