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  #11  
Old 11-03-2005, 01:34 PM
vulturesrow vulturesrow is offline
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Join Date: Apr 2004
Posts: 24
Default 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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  #12  
Old 11-03-2005, 04:06 PM
jaxmike jaxmike is offline
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Join Date: Nov 2004
Posts: 636
Default Re: Lower unemployment rate= higher inflation

[ QUOTE ]
[ QUOTE ]
[ QUOTE ]
[ QUOTE ]
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.

[/ QUOTE ]

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

[/ QUOTE ]

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

[/ QUOTE ]

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.
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  #13  
Old 11-03-2005, 07:58 PM
FishHooks FishHooks is offline
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Default Re: Lower unemployment rate= higher inflation

Apparently your not going to be happy with Mr. Bernake.
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  #14  
Old 11-03-2005, 08:22 PM
Dan Mezick Dan Mezick is offline
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Location: Foxwoods area
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Default 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.
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  #15  
Old 11-04-2005, 12:36 AM
vulturesrow vulturesrow is offline
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Default 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.
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