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Ep. 245 Cutting Larry Summers Some Slack on His Labor Market Remarks

Bob Murphy Show

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Is There a Trade Off Between Unemployment and Consumer Price Inflation?

According to the phillips curve, if you're willing to tolerate high price inflation, then you can get a low un employment rate. But if, ofnif you know, cees price inflation last month was eight %, that's too high. The fet needs a tighten. If you want to reduce inflation, then the unemployment rate's going to have to jump up. That's how it works in modern cansine economics. They don't just increase in money, which is what mainstream economists say they mean by consumerPriceInflation (CPI) And so the idea was oh, either you have a booming economy withlow unemployment or there is this ostensible trade off between unemployment

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