Today we will learn about the short-run and long-run Phillips curves, and discuss whether there is a tradeoff between inflation and unemployment. You should have read the text chapter identified below in the homework section and watched the related videos. We will start class today with you working cooperatively with a partner to find a solution to the "Problem of the Day" and then there will be a lecture on our next topic. This page contains all the information you need for today's class: homework, the problem of the day, helpful resources (videos, podcasts, etc.) and an explanation of the activities we will do in class. Use the table of contents on the right to help you navigate.
Read Mankiw Chapter 35 ("The Phillips Curve" and "Shifts In The Phillips Curve: The Role Of Expectations" sections) and watch the following videos.
Problem of the Day
Define the following terms: deflation, disinflation, and money rule.
Identify the equation used by Monetarists to explain the macroeconomy and the one used by Keynesians.
Explain why Monetarists advocate the use of a money rule in managing the economy.
Lecture
Related Readings