Lecture 12

Aggregate Supply and the Short-Run Tradeoff Between Inflation and Unemployment

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Lecture 12. Aggregate Supply

The Basic Theory of Aggregate Supply

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Lecture 12. Aggregate Supply

1. The Sticky-Price Model

2. The Imperfect-Information Model

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Lecture 12. Aggregate Supply

Case Study: International Differences in the Aggregate Supply Curve

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Lecture 12. Aggregate Supply

Summary and Implications

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Lecture 12. Aggregate Supply

Summary and Implications

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Lecture 12. Aggregate Supply

Inflation, Unemployment, and the Phillips Curve

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Lecture 12. Aggregate Supply

• The History of the Modern Phillips Curve

• Adaptive Expectations and Inflation Inertia

• Two Causes of Rising and Falling Inflation

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Lecture 12. Aggregate Supply

Case Study: Inflation and Unemploymentin the United States

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Lecture 12. Aggregate Supply

The Short-Run Tradeoff Between Inflationand Unemployment

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Lecture 12. Aggregate Supply

The Short-Run Tradeoff Between Inflationand Unemployment

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Lecture 12. Aggregate Supply

FYI: How Precise Are Estimates of the Natural Rate of Unemployment?

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Lecture 12. Aggregate Supply

• Disinflation and the Sacrifice Ratio• Rational Expectations and the Possibility of Painless Disinflation• Case Study: The Sacrifice Ratio in Practice

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Lecture 12. Aggregate Supply

• Hysteresis and the Challenge to the Natural-Rate Hypothesis

• Hysteresis and the Long-Run Phillips Curve

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Lecture 12. Aggregate Supply

The Mother of All Models

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Lecture 12. Aggregate Supply

Conclusion