Re: Lower unemployment rate= higher inflation
 

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I can tell I'm going to get pounded on this one, but for people who know what I'm talking about and know about economics, how many of you agree with the statment that a low unemployment rate = higher inflation, and thus having unemployment at about 3-5% is actually good for the economy.

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I don't think any mainstream economist believes this anymore.

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Um. Wow. If by mainstream you mean ignorant, then yes, you are right.

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It is, at best, a short run effect. Bobman was correct in statement in that both theoreticl and empirical work has shown the long run Phillips curve to be incorrect.

Re: Lower unemployment rate= higher inflation
 

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I can tell I'm going to get pounded on this one, but for people who know what I'm talking about and know about economics, how many of you agree with the statment that a low unemployment rate = higher inflation, and thus having unemployment at about 3-5% is actually good for the economy.

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I don't think any mainstream economist believes this anymore.

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Um. Wow. If by mainstream you mean ignorant, then yes, you are right.

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It is, at best, a short run effect. Bobman was correct in statement in that both theoreticl and empirical work has shown the long run Phillips curve to be incorrect.

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Then I need to do some new reading.

Re: Lower unemployment rate= higher inflation
 

Apparently your not going to be happy with Mr. Bernake.

Re: Lower unemployment rate= higher inflation
 

Supply and Demand. When employment is near max, employees can ask and get wage hikes. Labor is a huge cost factored into prices of everything. That's an inflationary effect.

Add to this monetary inflation (money supply growth). When workers sense that prices are going higher for basic food/clothing/shelter/insurance/higher ed, etc, thay ask for and demand more wages. That's an inflationary effect.

Re: Lower unemployment rate= higher inflation
 

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Apparently your not going to be happy with Mr. Bernake.

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Im pretty happy with his nomination, but thanks for your concern.