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บทความ

กำลังแสดงโพสต์จาก ตุลาคม, 2011

Phillips Curve and Natural rate of unemployment (Abridged)

บทความโดย วรรณพงษ์ ดุรงคเวโรจน์ As you known, the Phillips curve show the negative relationship between inflation and unemployment. There is trade off between two objectives of Macroenonomics. I will not show you about the besic idea about the conditions of Phillips cuve but I will begin with the problem of this relationship that Keynes can not explain.(also New Keynes or Neo-Keynes).


(from http://economicsonline.co.uk/Global_economics/Phillips_curve.html)
From the graph,
1. Initially, at point A, the unemplotment rate is 10 percent and the inflation rate is 0 percent.
2. This unemployment rate is the natural rate of unemployment and government and central bank attempt to reduce it through the expansionart policy (Fiscal and monetary policy).
3.Suppose the monetary policy is used. There are more money supple in circulation and contribute to an increase in price of goods and services and the employers want to expand their output by hiring the worker with higher wage that the demand for…