Relationship between Unemployment and Inflation 

The Short-Run and Long-Run Relationship between Unemployment and Inflation. Unemployment and inflation are an economy’s two most important macroeconomic issues.

Relationship between Unemployment and Inflation

Unemployment and inflation are an economy’s two most important macroeconomic issues. The federal government’s fiscal policy and the Federal Reserve’s monetary policy try to maintain both a low unemployment rate around a natural rate and a low inflation rate around 2%.

*Evaluate the historical relationship between unemployment and inflation. (hint: You may start from A.W. Phillips’s finding of the relationship between unemployment and inflation.)

*Distinguish between the short-run and the long-run in a macroeconomic analysis. Why is the relationship between unemployment and inflation different in the short-run and the long-run?

*Assess the recent 20-year U.S. unemployment and inflation data. Do the current U.S. unemployment and inflation data confirm the short-run Phillips curve?

Also, assess the recent 20-year U.S. unemployment and inflation data. Do the current U.S. unemployment and inflation data confirm the short-run Phillips curve?

Finally, analyze why the recent 20-year U.S. unemployment and inflation data approves or disproves the short-run Phillips curve.

Evaluate whether the Phillips curve can still validly resolve today’s issue of unemployment and inflation and forecast unemployment and inflation. Why or why not?

*Recommend any policy, method, or opinions for the current U.S. unemployment and inflation as a policy maker for either fiscal policy or monetary policy (or both).

Must use at least five scholarly, peer-reviewed, and other credible sources in addition to the course text.

More details;

What happens to unemployment during inflation?
As unemployment rates increase, inflation decreases; as unemployment rates decrease, inflation increases. Short-Run Phillips Curve: The short-run Phillips curve shows that in the short-term there is a tradeoff between inflation and unemployment. … As unemployment decreases to 1%, the inflation rate increases to 15%.

Place this order or similar order and get an amazing discount. USE Discount “GET12” for 12%

Calculate the price of your order

Basic features
  • Free title page and bibliography
  • Unlimited revisions
  • Plagiarism-free guarantee
  • Money-back guarantee
  • 24/7 support