The Possible Unemployment Cost of Average Inflation below a Credible Target
نویسنده
چکیده
! Average inflation below target in Sweden 1997-2011 ! Average inflation expectations (Prospera) close to target 1997-2011 Questions to be answered: ! If inflation expectations stuck at target when average inflation deviates from target, non-vertical long-run Phillips curve? ! If lower average inflation, higher average unemployment? ! If estimates of sustainable unemployment rate based on historical averages, bias? ! Policy conclusions for the future?
منابع مشابه
Why Leaning Against the Wind Is the Wrong Monetary Policy for Sweden
Should inflation targeting involve some leaning against the wind? Sweden provides a case study, since the Riksbank has been leaning against the wind quite aggressively since 2010, stating concerns about risks associated with household indebtedness. The cost is high of this policy, in the form of inflation much below the target and a higher unemployment, arguably as much 1.2 percentage points hi...
متن کاملThe Effect of Central Bank’s Monetary Policy on Unemployment and Inflation in Provinces of Iran: A GVAR Approach
The national economy of most countries is made up of various regions (provinces) with different industrial composition, financial structure, trade relations, and institutional environment. Depending on these characteristics, regions may respond differently to a uniform national macroeconomic policy. Policymakers should consider these heterogeneities to achieve the national development objective...
متن کاملUnemployment, Inflation and Income Distribution: A Cross- country Analysis
This is the first study to attempt to explain income inequality using unemployment and inflation and international cross-sectional data. Using a SURE system, inflation is found to have an increasing impact on the shares of the lower 80% of the income distribution, while reducing the share of the highest 20%. Unemployment has a negative effect on the share of the first 40%, while increases the s...
متن کاملWhat Labor Market Theory Tells Us about the "New Economy"
The average unemployment rate for 1997 was 4.9 percent, well below most estimates of the nonaccelerating inflation rate of unemployment (NAIRU).1 One would therefore have expected to see an increase in inflation in 1997; yet, as measured by the CPI, inflation fell from 3.3 percent to 1.7 percent (December to December). This phenomenon of low unemployment accompanied by falling inflation has pro...
متن کاملThe Relationship between Government Size and Happiness
Introduction: Although the use of the happiness economy approach does not have much history, since policy makers generally make decisions in the direction of increasing well-being and public satisfaction, it becomes important to quantify the concept of mental well-being and examine the factors affecting it in order to improve happiness in society. Methods: The purpose of this research is to in...
متن کامل