According to Phillips Curve, this has a inverse relationship between unemployment rate and rate of inflation, simply, the lower the unemployment in an economy, the higher the rate of inflation in that economy.
is there any possible to have an economy that low unemployment rate and low inflation rate happen at the same time?
Thanks.
2006-10-16 05:12:52 · 4 answers · asked by Anonymous in Social Science ➔ Economics
It is possible, and it was achieved during the Clinton Administration. UK also acheived this as well under
Tony Blair.
2006-10-16 06:02:14 · answer #1 · answered by Answerer17 6 · 0⤊ 0⤋
Yes.
Inflation has more to do with the monetary policy and unemployment has more to do with the overall economy. In the 70s there was high inflation and high unemployment (stagflation) due to the monetary crisis spending on Vietnam, the Great society, AND going off of the gold standard. It stands to reason the opposite is also possible. The 90s are a pretty good example of this.
Increasing the money supply can lower unemployment and vice versa but money supply is not the only thing that affects unemployment. Back in old time when people traded gold or bartered there was no inflation but economies would still grow and flourish and I'm sure some would have very low unemployment rates.
2006-10-16 05:55:28 · answer #2 · answered by Eddie B 2 · 0⤊ 0⤋
seek for documents. talked approximately as RTI. they arent manipulated by using politics. that's a hallmark of retail fee will strengthen over the rustic. i think of by using private fee of inflation, it potential how lots of my buying means became eroded by way of inflation. properly, in case you purchase products from the food market (low YED- income elasticity of call for. in different words. their strengthen in fee doesnt decrease your potential to eat them) , then it wont result you. yet once you have a tendency to purchase extra costly issues which you experience are mandatory (intense YED), then your individual inflation does result you than it outcomes the traditional. thats reason funds became devalued, and you attempt to purchase some thing that has extra desirable in fee in the shop
2016-10-16 06:24:22 · answer #3 · answered by ? 4 · 0⤊ 0⤋
Perhaps in WAR time-- I do mean World War.
not a conflict like we have today.
2006-10-16 05:19:44 · answer #4 · answered by cork 7 · 0⤊ 0⤋