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Economic Consider the augmented Phillips curve as a relation between inflation and unemployment: It= 1 - 2(u- u) where it is expected inflation and u
Economic
Consider the augmented Phillips curve as a relation between inflation and unemployment: It= 1 - 2(u- u) where it is expected inflation and u is the natural rate of umemployment. If expected inflation is 0.02 and the natural rate of unemployment is 0.04, what should the actual unemployment rate have to be to get an actual inflation rate of -0.02? Give your answer as a decimal with 3 decimal placesStep by Step Solution
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