INFLATIONCLASS

INFLATIONCLASS - Prices, Inflation and the SR Phillips...

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1 1 Prices, Inflation and the SR Phillips Curve 2 Key Points ± CPI – interpretation, calculation, problems, use ± GDP Deflator interpretation and use ± Real and Nominal Interest rates ± Inflation in the Short-Run – Keynesian ² Demand-pull, cost push ² Wage- price Spirals ² Wage Price Guidelines ± Short-run Phillips Curve ± Growth rates & Rule of 72/70/69 3 Course Issues ± Inv game round 2 ± Clicker points ± More than half done-start studying for the final exam ± Wikis ± EC ± HW Q&A posted ± Midterms in other courses? ± Business School update
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2 4 In the News? 5 CPI Uses ± Used for: ² tracking changes in cost of living/ inflation ² Deflating nominal variables ² adjust contracts for inflation “COLAs” ± Not a true cost of living index ± Note large role of housing ² Medical, etc? ± Core CPI – w/o energy & food 6 How the CPI is Calculated. ± Consumer Expenditure Survey (CES) irregular – typical consumer’s “basket” of goods in base year ² 30,000 individuals and families, 80,000 items 2001-02 ± Monthly collection of data on prices of all items in the
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This note was uploaded on 03/24/2011 for the course ECON 103 taught by Professor Lin during the Summer '08 term at Rutgers.

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INFLATIONCLASS - Prices, Inflation and the SR Phillips...

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