INFLATIONCLASS - Prices, SR Inflation & Phillips Curve...

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1 Prices, SR Inflation & Phillips Curve 1 Inflation friedman infl causes Inflation – deflation explained 40 Key Points ± CPI – interpretation, calculation, problems ± GDP Deflator and Chain weighted indexes ± Harm of Inflation-anticipated, unanticipated ² Inefficient use of money, distortion of price system, redistribution lenders/borrowers, uncertainty ² Harm of Deflation, Hyperinflation 2 ± Inflation Causes in the Short-Run – Keynesian ² Demand-pull, cost push ² Wage- price Spirals ² Wage Price Guidelines ± Deflation ± Short-run Phillips Curve Course Issues ± Online Midterm –Window from Tuesday 3/8 6pm thru Thursday 3/8 6pm 50 questions covering weeks 1-7 60 minutes – DO NOT POST QUESTIONS RE MIDTERM AFTER 6 pm Tuesday ± HW 9 will be due on the THURSDAY we return from break 3
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2 In the News? 4 Consumer Price Index Release - BLS ± The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.1 percent in September on a seasonally adjusted basis ± Over the last 12 months, the all items index increased 1.1 percent before seasonal adjustment 5 adjustment. ± Increases in food indexes and another rise in the gasoline index contributed to the all items seasonally ± The index for all items less food and energy was unchanged in September, as it was in August. CPI Uses ± Used for: ² tracking changes in cost of living/ inflation ² Deflating nominal variables ² adjust contracts for inflation “COLAs” 6 ± Not a true cost of living index ± Note large role of housing ² Medical, etc?
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This note was uploaded on 10/25/2011 for the course ECONOMICS 01:220:103 taught by Professor Sheflin during the Spring '08 term at Rutgers.

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INFLATIONCLASS - Prices, SR Inflation & Phillips Curve...

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