inflation unemployment trade off pdf

In turn, long-run superneutrality is the proposition that a permanent, exogenous change in the growth rate of money supply does not affect the level of real variables in the long run and leads to an equal change in the nominal interest rate. Graphically, the economy moves from point B to point C. Click here to sign up. In Section 2 we argue that the monetary environment is better described by money growth than the widely used federal funds rate, since money growth reflects not simply the level of the yield curve but its slope and curvature as well. Specifically, counterfactual simulations of the empirical CRT model, where each exogenous variable was fixed at its value from to while the rest were on their actual trajectories , showed that a number of factors influenced the time paths of unemployment and inflation over the — period.

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