andExpectations(宏观经济学-加州大学-詹姆斯·布.pptx

CHAPTER 12
The Phillips Curve and Expectations
1
Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Questions
What is the Phillips curve?
How has the natural rate of unemployment changed in the . over the past two generations?
What determines the expected rate of inflation?
How can we tell how expectations of inflation are formed--whether they are static, adaptive, or rational?
2
Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Questions
How useful is the aggregate demand-aggregate supply framework--the IS-LM model and the Phillips curve--for understanding macroeconomic events in the . over the past two generations?
How do we connect up the sticky-price model with the flexible-price model?
3
Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Okun’s Law
Okun’s law shows the relationship between the unemployment rate and real GDP
or
4
Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
The Three Faces of Aggregate Supply
Aggregate supply relates the price level to the level of real GDP
Aggregate supply can also relate the inflation rate to the level of real GDP
Using Okun’s law, aggregate supply can also relate the inflation rate to the unemployment rate
this relationship is known as a Phillips curve
5
Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
The Phillips Curve
Aggregate supply can relate the inflation rate to the level of real GDP
The right-hand side of this equation can be substituted into Okun’s Law
6
Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
The Phillips Curve
Letting =/, we get the Phillips curve
To allow for supply shocks, we will add an extra term to the Phillips curve (s)
7
Copyright © 2002 by The McGraw-Hill Companies, Inc. All rights reserved.
Figure - The Phillips Curve
8
Copyright © 2002 by The McGraw-Hill Companies, Inc. All righ