Presentation on theme: "Macroeconomic Analysis 2003"— Presentation transcript:
1 Macroeconomic Analysis 2003 Phillips’ Curve and the Natural Rate of Unemployment HypothesisLecture 8
2 ContentsMotivationReview of Inflation and unemployment rates over timePhillips CurveOutput GAP: Potential and Actual OutputWage Price SpiralExpectation Augmented Phillips curveSome exercisesLecture 8
3 Measurement and Analysis of Fluctuations in the Economy Lecture 8
4 Unemployment and Inflation Current unemployment rate:Current Inflation Rates from the Treasury Web pageHeadline inflation – RPI (Dec)2.9%, up from 2.6 % the previous monthUnderlying inflation – RPIX (Dec)2.7%, down from 2.8% the previous monthHICP inflation (Dec)1.7%, up from 1.6% the previous monthProducer output prices (Jan nsa)1.6%, up from 1.3% - revised in the previous monthProducer input prices (Jan nsa)3.6%, up from 2.8% - revised the previous monthHalifax house prices (Jan)Down 1.5% on Dec and up 22.5% on a year earlierLecture 8
46 Exercise Should wage rises of workers (fire fighters) come from modernisation of services as suggested by the government or by the negotiation between the unions and the government?Natural rate of unemployment and price and wage bargainingAggregate supplyLecture 8
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