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phillips curve controversy
That said, I'm no expert so hesitate to change the article to delete the reference, without at least giving someone the chance to put me in my place. Besides, my undergraduate classed were Keynes-heavy and therefore possibly biased. Jesus Saves 19:40, 12 March 2010 (EST)
That said, I'm no expert so hesitate to change the article to delete the reference, without at least giving someone the chance to put me in my place. Besides, my undergraduate classed were Keynes-heavy and therefore possibly biased. Jesus Saves 19:40, 12 March 2010 (EST)
:From what I understand, the Phillips Curve was originally derived from observation, plotting unemployment rates versus inflation. I believe that monetarists and the Federal Reserve use this relationship more than Keynesians and were the first to explain the relationship. The idea is that increased money supply will encourage lending by creditors, depress interest rates and increase employment because borrowing is so cheap. The increase in the money supply and increased velocity causes inflation to rise at the same time. Unemployment rises in recessions because credit is tight and interest rates rise because firms are less willing to lend in periods of economic uncertainty. Correspondingly with rising interest rates, inflation is low. I believe this clause should be deleted too and I will probably make some edits in the next few days unless there are any who really like this page as is.