宏观经济学英文版第九章.ppt

Output, Unemployment,and Inflation This chapter characterizes the economy by three relations: Okun’s Law, which relates the change in unemployment to output growth. The Phillips curve, which relates the changes in inflation to unemployment. The aggregate demand relation, which relates output growth to both nominal money growth and inflation. Okun’s Law According to the equation above, the change in the unemployment rate should be equal to the negative of the growth rate of output. For example, if output growth is 4%, then the unemployment rate should decline by 4%. Note : This equation is derived from following two convenient but restrictive assumption : Output moved one for one with employment ,ie. Y=N; Labor force was constant ,so changes in employment was reflected on efor one in opposite changes in unemployment. Okun’s Law The actual relation between output growth and the change in the unemployment rate is known as Okun’s law. Using thirty years of data in the united states , the relation that best fits the data is given by: This equation differs from prior equation in two ways : A. It considers factors such as labor force growth and labor productivity growth ,3%.It implies that just to maintain a constant unemployment rate ,output growth must be equal to the sum of labor force growth and labor productivity growth. Okun’s Law Okun’s Law According to the equation above, Okun’s Law Using letters rather than numbers: The Phillips Curve Inflation depends on expected inflation and on the deviation of unemployment from the natural rate of unemployment. When ?et is well approximated by ?t-1, then: The Aggregate Demand Relation The aggregate demand relation, as stated in chapter 7, adding the time indices: The Aggregate Demand Relation From the relation that above equation gives , we can derive another relation between growth rates---- the growth rate of out put, gyt, the growth rate money ,gmt, and the inflation rate (the growth rate of pri