Question
Can you please give me advice on the following question? The end of the pandemic period is normalized to Year 0 by the government. In
Can you please give me advice on the following question?
The end of the pandemic period is normalized to Year 0 by the government. In Year 0, the inflation rate is zero and the unemployment rate is 5%. In Year 1, the rate of inflation is observed to be 1%. In Year 2, inflation is observed to be 2% and in Year 3, the inflation is observed to be 3%. Unemployment remains unchanged at 5% in all 3 years.
You are informed that prior to the pandemic, the equilibrium (i.e. inflation-stabilizing) rate of unemployment was 5%.
Using an appropriate diagram, explain why inflation is rising year by year when unemployment remains at 5%.
Compare the unemployment and inflation situation before and after the pandemic and suggest how the pandemic may have contributed to the differences observed.
It's really hard to find the relevant source for this. Can you give me several academic articles or journals?
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