Business, 06.09.2021 22:10 Ryleetarver

The Phillips Curve could accurately guide activist policymakers over the long run. The inflation rate will consistently be 2 percentage points below the unemployment rate. Economic participants would soon understand activist policymakers' strategy and revise their expectations, making discretionary efforts to fine-tune the economy ineffective. The inverse relationship between unemployment and inflation only holds in the long run. In the short run, unemployment and inflation are positively related.

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The Phillips Curve could accurately guide activist policymakers over the long run. The inflation rat...