Unemployment and Inflation: The Untold Story Behind Economic Policy
The article discusses the New Keynesian Phillips Curve, which looks at the relationship between inflation and unemployment in economies. It explores how inflation tends to rise during times of high economic activity. The researchers examine how policymakers can balance inflation and unemployment levels. The study shows that the traditional view of the Phillips curve was discredited after high inflation in the 1970s, but has been revisited with the New Keynesian Phillips curve. This new model considers nominal price rigidities and their impact on economic policies.