《宏观经济学教学课件》Chapter_07.pptVIP

Introduction So far have focused on how various economic factors determine output, prices, unemployment, and inflation ? now examine the consequences of inflation and unemployment and the tradeoff between them What are the “big picture” costs of moderate inflation and unemployment rates? There are two major costs of unemployment: Lost production Undesirable effects on the distribution of income The costs of inflation depend on the type: Unanticipated inflation creates significant redistribution of wealth Impact of anticipated inflation, especially of moderate levels, is small Unemployment The greatest single cost of unemployment is lost production ? people who can’t work don’t produce This cost is large: a recession can easily cost 3-5% of GDP and hundreds of billions of dollars Okun’s law states that 1 extra point of unemployment costs 2% of GDP [See Figure 7-1] Costs are borne unevenly, and largely by those who lose their jobs Workers just entering the labor force and teenagers are amongst the hardest hit Inflation Costs of extremely high inflation are easy to see M lubricates the economy ? if P increase dramatically: money is no longer a useful medium of exchange output can drop substantially Costs of low, single-digit inflation are more difficult to identify Unanticipated inflation has a distributional cost: debtors benefit by repaying in cheaper dollars creditors suffer by being repaid in cheaper dollars The Anatomy of Unemployment Research has revealed five key characteristics of unemployment in the U.S. There are large variations in unemployment rates across groups defined by age, race, or experience. There is high turnover in the labor market. Flows into and out of employment and unemployment are high relative to the numbers of employed or unemployed. A significant part of this turnover is cyclical: Layoffs and separations are high during recessions, and voluntary quits are high during booms. Most people who become unemployed in any given month remain un