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Forecast inflation and unemployment one-year ahead, making an assumption about next year's real GDP growth rate and using the Okun's law and the Phillips curve.
Forecast inflation and unemployment one-year ahead, making an assumption about next year's real GDP growth rate and using the Okun's law and the Phillips curve. You may assume a b coefficient of 1, that expected inflation is equal to actual inflation, and a negative supply shock v=0.5%. Provide an interpretation of the supply shock based on current events in the news. Make sure you justify your assumption of the real GDPphi growth rate, either documenting precisely its source or explaining your reasoning.
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