曼昆《经济学原理》(宏观经济学分册)英文原版PPT课件——35short_run.ppt

Click to edit Master title style,Click to edit Master text styles,Second level,Third level,Fourth level,Fifth level,Copyright 2004 South-Western,35,The Short-Run Tradeoff between Inflation and Unemployment,Unemployment and Inflation,The natural rate of unemployment depends on various features of the labor market.,Examples include minimum-wage laws,the market power of unions,the role of efficiency wages,and the effectiveness of job search.,The inflation rate depends primarily on growth in the quantity of money,controlled by the Fed.,Unemployment and Inflation,Society faces a short-run tradeoff between unemployment and inflation.,If policymakers expand aggregate demand,they can lower unemployment,but only at the cost of higher inflation.,If they contract aggregate demand,they can lower inflation,but at the cost of temporarily higher unemployment.,THE PHILLIPS CURVE,The,Phillips curve,illustrates the short-run relationship between inflation and unemployment.,Figure 1 The Phillips Curve,Unemployment,Rate(percent),0,Inflation,Rate,(percent,per year),Phillips curve,4,B,6,7,A,2,Copyright 2004 South-Western,Aggregate Demand,Aggregate Supply,and the Phillips Curve,The Phillips curve shows the short-run combinations of unemployment and inflation that arise as shifts in the aggregate demand curve move the economy along the short-run aggregate supply curve.,Aggregate Demand,Aggregate Supply,and the Phillips Curve,The greater the aggregate demand for goods and services,the greater is the economys output,and the higher is the overall price level.,A higher level of output results in a lower level of unemployment.,Figure 2 How the Phillips Curve is Related to Aggregate Demand and Aggregate Supply,Quantity,of Output,0,Short-run,aggregate,supply,(a)The Model of Aggregate Demand and Aggregate Supply,Unemployment,Rate(percent),0,Inflation,Rate,(percent,per year),Price,Level,(b)The Phillips Curve,Phillips curve,Low aggregate,demand,High,aggregate demand,(output is,8,000),B,4,6,(output is,7,500),A,7,2,8,000,(unemployment,is 4%),106,B,(unemployment,is 7%),7,500,102,A,Copyright 2004 South-Western,SHIFTS IN THE PHILLIPS CURVE:THE ROLE OF EXPECTATIONS,The Phillips curve seems to offer policymakers a menu of possible inflation and unemployment outcomes.,The Long-Run Phillips Curve,In the 1960s,Friedman and Phelps concluded that inflation and unemployment are unrelated in the long run.As a result,the long-run Phillips curve is vertical at the,natural rate of unemployment,.,Monetary policy could be effective in the short run but not in the long run.,Figure 3 The Long-Run Phillips Curve,Unemployment,Rate,0,Natural rate of,unemployment,Inflation,Rate,Long-run,Phillips curve,B,High,inflation,Low,inflation,A,2.but unemployment,remains at its natural rate,in the long run.,1.When the,Fed increases,the growth rate,of the money,supply,the,rate of inflation,increases.,Copyright 2004 South-Western,Figure 4 How the Phillips Curve is Related to Aggregate Demand and Aggregate Supply,Quantity,of Output,Natural rate,of output,Natural rate of,unemployment,0,Price,Level,P,Aggregate,demand,AD,Long-run aggregate,supply,Long-run Phillips,curve,(a)The Model of Aggregate Demand and Aggregate Supply,Unemployment,Rate,0,Inflation,Rate,(b)The Phillips Curve,2.raises,the price,level.,1.An increase in,the money supply,increases aggregate,demand.,A,AD,2,B,A,4.but leaves output and unemployment,at their natural rates.,3.and,increases the,inflation rate.,P,2,B,Copyright 2004 South-Western,Expectations and the Short-Run Phillips Curve,Expected inflation measures how much people expect the overall price level to change.,Expectations and the Short-Run Phillips Curve,In the long run,expected inflation adjusts to changes in actual inflation.,The,Feds,ability to create unexpected inflation exists only in the short run.,Once people anticipate inflation,the only way to get unemployment below the natural rate is for actual inflation to be above the anticipated rate.,This equation relates the unemployment rate to the natural rate of unemployment,actual inflation,and expected inflation.,Expectations and the Short-Run Phillips Curve,Unemployment Rate=,Figure 5 How Expected Inflation Shifts the Short-Run Phillips Curve,Unemployment,Rate,0,Natural rate of,unemployment,Inflation,Rate,Long-run,Phillips curve,Short-run Phillips curve,with high expected,inflation,Short-run Phillips curve,with low expected,inflation,1.Expansionary policy moves,the economy up along the,short-run Phillips curve2.but in the long run,expected,inflation rises,and the short-run,Phillips curve shifts to the right.,C,B,A,Copyright 2004 South-Western,The Natural Experiment for the Natural-Rate Hypothesis,The view that unemployment eventually returns to its natural rate,regardless of the rate of inflation,is called the,natural-rate hypothesis,.,Historical observations support the natural-rate hypothesis.,The Natural Experiment for the Natural Rate Hypothesis,The concept of a stable Phillips curve broke down in the in the early 70s.,During the 70s and 80s,the economy experienced high inflation and high unemployment simultaneously.,Figure 6 The Phillips Curve in the 1960s,1,2,3,4,5,6,7,8,9,10,0,2,4,6,8,10,Unemployment,Rate(percent),Inflation Rate,(percent per year),1968,1966,1961,1962,1963,1967,1965,1964,Copyright 2004 South-Western,Figure 7 The Breakdown of the Phillips Curve,1,2,3,4,5,6,7,8,9,10,0,24,6,8,10,Unemployment,Rate(percent),Inflation Rate,(percent per year),1973,1966,1972,1971,1961,1962,1963,1967,1968,1969,1970,1965,1964,Copyright 2004 South-Western,SHIFTS IN THE PHILLIPS CURVE:THE ROLE OF SUPPLY SHOCKS,Historical events have shown that the short-run Phillips curve can shift due to changes in expectations.,SHIFTS IN THE PHILLIPS CURVE:THE ROLE OF SUPPLY SHOCKS,The short-run Phillips curve also shifts because of shocks to aggregate supply.,Major adverse changes in aggregate supply can worsen the short-run tradeoff between unemployment and inflation.,An adverse,supply shock,gives policymakers a less favorable tradeoff between inflation and unemployment.,SHIFTS IN THE PHILLIPS CURVE:THE ROLE OF SUPPLY SHOCKS,A,supply shock,is an event that directly alters the firms costs,and,as a result,the prices they charge.,This shifts the economys aggregate supply curve.,.and as a result,the Phillips curve.,Figure 8 An Adverse Shock to Aggregate Supply,Quantity,of Output,0,Price,Level,Aggregate,demand,(a)The Model of Aggregate Demand and Aggregate Supply,Unemployment,Rate,0,Inflation,Rate,(b)The Phillips Curve,3.and,raises,the price,level.,AS,2,Aggregate,supply,AS,A,1.An adverse,shift in aggregate,supply.,4.giving policymakers,a less favorable tradeoff,between unemployment,and inflation.,B,P,2,Y,2,P,A,Y,Phillips curve,P,C,2.lowers output.,PC,2,B,Copyright 2004 South-Western,SHIFTS IN THE PHILLIPS CURVE:THE ROLE OF SUPPLY SHOCKS,In the 1970s,policymakers faced two choices when OPEC cut output and raised worldwide prices of petroleum.,Fight the unemployment battle by expanding aggregate demand and accelerate inflation.,Fight inflation by contracting aggregate demand and endure even higher unemployment.,Figure 9 The Supply Shocks of the 1970s,1,2,3,4,5,6,7,8,9,10,0,2,4,6,8,10,Unemployment,Rate(percent),Inflation Rate,(percent per year),1972,1975,1981,1976,1978,1979,1980,1973,1974,1977,Copyright 2004 South-Western,THE COST OF REDUCING INFLATION,To reduce inflation,the Fed has to pursue,contractionary,monetary,policy,.,When the Fed slows the rate of money growth,it contracts aggregate demand.,This reduces the quantity of goods and services that firms produce.,This leads to a rise in unemployment.,Figure 10,Disinflationary,Monetary Policy in the Short Run and the Long Run,Unemployment,Rate,0,Natural rate of,unemployment,Inflation,Rate,Long-run,Phillips curve,Short-run Phillips curve,with high expected,inflation,Short-run Phillips curve,with low expected,inflation,1.,Contractionary,policy moves,the economy down along the,short-run Phillips curve.,2.but in the long run,expected,inflation falls,and the short-run,Phillips curve shifts to the left.,B,C,A,Copyright 2004 South-Western,THE COST OF REDUCING INFLATION,To reduce inflation,an economy must endure a period of high unemployment and low output.,When the Fed combats inflation,the economy moves down the short-run Phillips curve.,The economy experiences lower inflation but at the cost of higher unemployment.,THE COST OF REDUCING INFLATION,The,sacrifice ratio,is the number of percentage points of annual output that is lost in the process of reducing inflation by one percentage point.,An estimate of the sacrifice ratio is,five,.,To reduce inflation from about 10%in 1979-1981 to 4%would have required an estimated sacrifice of 30%of annual output!,Rational Expectations and the Possibility of,Costless,Disinflation,The theory of,rational expectations,suggests that people optimally use all the information they have,including information about government policies,when forecasting the future.,Rational Expectations and the Possibility of,Costless,Disinflation,Expected inflation explains why there is a tradeoff between inflation and unemployment in the short run but not in the long run.,How quickly the short-run tradeoff disappears depends on how quickly expectations adjust.,Rational Expectations and the Possibility of,Costless,Disinflation,The theory of rational expectations suggests that the sacrifice-ratio could be much smaller than estimated.,The,Volcker,Disinflation,When Paul,Volcker,was Fed chairman in the 1970s,inflation was widely viewed as one of the nations foremost problems.,Volcker,succeeded in reducing inflation(from 10 percent to 4 percent),but at the cost of high employment(about 10 percent in 1983).,Figure 11 The,Volcker,Disinflation,1,2,3,4,5,6,7,8,9,10,0,2,4,6,8,10,Unemployment,Rate(percent),Inflation Rate,(percent per year),1980,1981,1982,1984,1986,1985,1979,A,1983,B,1987,C,Copyright 2004 South-Western,The,Greenspan,Era,Alan,Greenspans,term as Fed chairman began with a favorable supply shock.,In 1986,OPEC members abandoned their agreement to restrict supply.,This led to falling inflation and falling unemployment.,Figure 12 The,Greenspan,Era,1,2,3,4,5,6,7,8,9,10,0,2,4,6,8,10,Unemployment,Rate(percent),Inflation Rate,(percent per year),1984,1991,1985,1992,1986,1993,1994,1988,1987,1995,1996,2002,1998,1999,2000,2001,1989,1990,1997,Copyright 2004 South-Western,The,Greenspan,Era,Fluctuations in inflation and unemployment in recent years have been relatively small due to the,Feds,actions.,Summary,The Phillips curve describes a negative relationship between inflation and unemployment.,By expanding aggregate demand,policymakers can choose a point on the Phillips curve with higher inflation and lower unemployment.,By contracting aggregate demand,policymakers can choose a point on the Phillips curve with lower inflation and higher unemployment.,Summary,The tradeoff between inflation and unemployment described by the Phillips curve holds only in the short run.,The long-run Phillips curve is vertical at the natural rate of unemployment.,Summary,The short-run Phillips curve also shifts because of shocks to aggregate supply.,An adverse supply shock gives policymakers a less favorable tradeoff between inflation and unemployment.,Summary,When the Fed contracts growth in the money supply to reduce inflation,it moves the economy along the short-run Phillips curve.,This results in temporarily high unemployment.,The cost of disinflation depends on how quickly expectations of inflation fall.,