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Social Science Clinic => Economics => Macroeconomics => Topic started by: Kthamas on Jan 2, 2020

Title: When the Friedman-Lucas money surprise model is incorporated into the Phillips curve,
Post by: Kthamas on Jan 2, 2020

When the Friedman-Lucas money surprise model is incorporated into the Phillips curve,
◦ when the inflation rate is rising, then output is below trend output.
◦ when the inflation rate is less than the expected inflation rate, output is greater than trend output.
◦ when the inflation rate is equal to the expected inflation rate, then output is equal to trend output.
◦ when the inflation rate is greater than the expected inflation rate, output is equal to trend output.
◦ when the expected inflation rate rises, output falls.

Title: When the Friedman-Lucas money surprise model is incorporated into the Phillips curve,
Post by: kilada on Jan 2, 2020

when the inflation rate is equal to the expected inflation rate, then output is equal to trend output.