《宏观经济学教学课件》Chapter_06.pptVIP

Introduction Further develop the AS side of the economy and examine the dynamic adjustment process that carries us from the short run to the long run The price-output relationship is based upon links between wages, prices, employment, and output ? link between unemployment and inflation = Phillips Curve Translate between unemployment and output, inflation and price changes Introduce role of price and inflation expectations, and the “rational expectations revolution” NOTE: theory of AS is the least settled area in macro Don’t fully understand why W and P are slow to adjust, but offer several theories All modern models differ in starting point, but reach the same conclusion: SRAS is flat, LRAS is vertical Inflation and Unemployment Figure 6.1 shows U.S. unemployment from 1959 to 2005 Several periods of high unemployment: early 1960s, mid 1970’s, early-mid 1980’s, and early 1990s Several periods of low unemployment: late 1960’s, early 2000 Phillips curve (PC) shows the relationship between unemployment and inflation Although GDP is linked to unemployment, it is easier to work with the PC than the AS when discussing unemployment The Phillips Curve In 1958 A.W. Phillips published a study of wage behavior in the U.K. between 1861 and 1957 The main findings are summarized in Figure 6.2 There is an inverse relationship between the rate of unemployment and the rate of increase in money wages From a policymaker’s perspective, there is a tradeoff between wage inflation and unemployment Phillips Curve The PC shows the rate of growth of wage inflation decreases with increases in unemployment If Wt = wage this period Wt+1 = wage next period gw = rate of wage inflation, then (1) If ?* represents the natural rate of unemployment, the simple PC is defined as: (2) where ? measures the responsiveness of wages to unemployment Wages are falling when ? ?* and rising when ? ?* (? - ?*) is called the unemployment gap Phillips Curve Sup