Econ Notes

Econ Notes - • In 1970s many countries experienced high...

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Econ Notes 11/29/11 Good intentions are no substitute for sound policies Big debate: is it government causes or market caused? For Keynesians inflation is only a concern if above full employment Keynesian trade off- unemployment and inflation, expansionary = high unemployment and restrictive = higher levels of inflation
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Unformatted text preview: • In 1970s many countries experienced high levels of inflation and unemployment and it was known as “stagflation”, theories based on Phillips curve suggested this could not happen • Misery index = inflation rate + unemployment rate • MV=PY (nominal GDP) •...
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