ECON 102 Lecture Notes - Lecture 20: Disinflation, Monetarism, Adaptive Expectations
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ECON 102 Full Course Notes
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Money in the usual times: the philips curve: short run u/ tradeoff: the philips curve, the long run philips curve, nairu, full employment, and monetary neutrality. I think of chapter 16 as having two sections: money and inflation in the usual circumstances , money and inflation in unusual circumstances hyperinflation and deflation. Today: the usual effects of money on unemployment, and its relation to inflation the. What"s usual here: periods of moderate inflation. In us experience post-wwii, roughly 1% - 15% (annual) inflation. Fast inflation and fast deflation were both typical pre-1950. Under the bretton woods monetary system (and after its collapse) that is, modern central banking low, stable, positive inflation has been the norm. Our ad-as model gives us a relationship between unemployment (via production relative to full employment levels) and inflation: the keynesian business cycle model is driven by ad shocks, ad-driven recessionary gap:
