During the past few recessions, government ran expansionary policies, but the duration of unemployment has risen. What does this suggest about the change in structural unemployment over this time period?

This chapter discusses causes of inflation.

a. Do you believe the cause of inflation is to be found in the institutional structure of wage- and price-setting institutions or in excess demand for goods and services?

b. If you believe inflation is caused by wage- and price-setting institutions, what type of policy would you recommend?

c. If you believe that inflation is caused by excess demand, would your policy recommendations be the same?