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Title Details:
Unemployment, Inflation, and Aggregate Supply
Authors: Kyrikos, Dimitrios
Reviewer: Vlassis, Minas
Subject: LAW AND SOCIAL SCIENCES > ECONOMIC SCIENCES > MACROECONOMICS AND MONETARY ECONOMICS
LAW AND SOCIAL SCIENCES > ECONOMIC SCIENCES > MACROECONOMICS AND MONETARY ECONOMICS > GENERAL AGGREGATIVE MODELS
LAW AND SOCIAL SCIENCES > ECONOMIC SCIENCES > MACROECONOMICS AND MONETARY ECONOMICS > MACROECONOMICS: CONSUMPTION, SAVING, PRODUCTION, EMPLOYMENT, AND INVESTMENT
LAW AND SOCIAL SCIENCES > ECONOMIC SCIENCES > MACROECONOMICS AND MONETARY ECONOMICS > PRICES, BUSINESS FLUCTUATIONS, AND CYCLES
LAW AND SOCIAL SCIENCES > ECONOMIC SCIENCES > MACROECONOMICS AND MONETARY ECONOMICS > MONEY AND INTEREST RATES
LAW AND SOCIAL SCIENCES > ECONOMIC SCIENCES > MACROECONOMICS AND MONETARY ECONOMICS > MONETARY POLICY, CENTRAL BANKING, AND THE SUPPLY OF MONEY AND CREDIT
LAW AND SOCIAL SCIENCES > ECONOMIC SCIENCES > MACROECONOMICS AND MONETARY ECONOMICS > MACROECONOMIC POLICY, MACROECONOMIC ASPECTS OF PUBLIC FINANCE, AND GENERAL OUTLOOK
LAW AND SOCIAL SCIENCES > ECONOMIC SCIENCES > INTERNATIONAL ECONOMICS > MACROECONOMIC ASPECTS OF INTERNATIONAL TRADE AND FINANCE
Description:
Abstract:
In this chapter, we discuss the two menaces of macroeconomics, unemployment and inflation. First, we define the forms of unemployment and introduce the crucial concept of the natural rate of unemployment which is related to long-run output. Also, we examine the consequences of inflation and discuss the cause of hyper-inflation and the inflation tax associated with it. The short-run negative relationship between inflation and unemployment is described through the Phillips curve which reflects the possibilities of short-run policy choices. Furthermore, the long-run relationship between inflation and unemployment appears to depend on inflationary expectations and, more specifically, the adjustment of expectations in the long-run seems to eliminate the inverse relationship implied by the short-run Phillips curve and the subsequent short-run policy options disappear. In the long-run, unemployment tends to its natural rate and policies aiming at reducing unemployment below that rate give rise to accelerating inflation. Finally, we show that the Phillips curve reflects a dynamic version of AS relating inflation and output.
Linguistic Editors: Kalokyri, Anastasia
Technical Editors: Karamolegkou, Maria
Type: Chapter
Creation Date: 2015
Item Details:
License: http://creativecommons.org/licenses/by-nc-nd/3.0/gr
Handle http://hdl.handle.net/11419/1567
Bibliographic Reference: Kyrikos, D. (2015). Unemployment, Inflation, and Aggregate Supply [Chapter]. In Kyrikos, D. 2015. Macroeconomic Analysis and Policy [Undergraduate textbook]. Kallipos, Open Academic Editions. https://hdl.handle.net/11419/1567
Language: Greek
Is Part of: Macroeconomic Analysis and Policy
Publication Origin: Kallipos, Open Academic Editions