Summary of the phillips curves, Macroeconomics

Assignment Help:

Summary of the Phillips curves

In neo-classical synthesis, augmented Phillips curve is known as the short-run Phillips curve. It is presumed to be stable as long as expectations of future inflation don't change. To summarize, we have three Phillips curves: 

 

  • Traditional Phillips curve. ΠW = f(U) and same downward sloping relationship applies to both the short and the long run.
  • Short-run Phillips curve (SPC). Πw = f(U) + Πe and curve is valid only in the short run (SPC = Short-run Phillips Curve).
  • Long-run Phillips curve (LPC). Πw = ΠM, U = UN and there is not any relationship between Πw and U (UN is natural rate of unemployment).

Related Discussions:- Summary of the phillips curves

Rate of growth, Rate of Growth  Every country desires economic growth. ...

Rate of Growth  Every country desires economic growth. A country's economic performance is often judged on the basis of - among other things - the rates of growth it has manage

When patulin molds can occur, Occurrence: It is found in a range of foods b...

Occurrence: It is found in a range of foods based on fruits. Presence of patulin in fruit juice is a indication that the juice was extracted from poor quality fruit which is undesi

Oecd, What is the significance of the observations made by OECD in this cas...

What is the significance of the observations made by OECD in this case study regarding “The OECD economies are more strongly dependent on the production, distribution and use of kn

Determine a decrease in lump sum taxes, Using Simple Keynesian Model, discu...

Using Simple Keynesian Model, discuss the effect of the following: a) An increase in govt. expenditure. b) A decrease in lump sum taxes. In this context compare the govt.

Social cohesion and increase the scope, "International bodies such as the a...

"International bodies such as the aced argue that more unequal income and wealth distribution erode social cohesion and increase the scope for internal conflict."

Explain the classical motivation, Q. Explain the classical motivation? ...

Q. Explain the classical motivation? The classical motivation: Consumers want to smooth their consumption over time. In good times, consumers know that it is a temporary stat

Imperfect-information model, According to the imperfect-information model, ...

According to the imperfect-information model, when the price level is greater than the expected price level, output will _____ the natural level of output A) be greater than

Break-even level of income, Assume that when an economy has a GDP of $500, ...

Assume that when an economy has a GDP of $500, Consumption is $550. The MPC is .75. Investment is 25. Begin the problem by setting up an Income/Consumption Schedule like the one on

Ricardo Viner Model, How does the Ricardo Viner diagram react when once pri...

How does the Ricardo Viner diagram react when once price changes, effects on real wages, and labor allocation?

Explain the term- inventory investment, Explain the term- inventory investm...

Explain the term- inventory investment We would have a negative inventory investment whenever inventories decrease. By net investments we mean gross investments minus depreciat

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd