andExpectations宏觀經(jīng)濟(jì)學(xué)-加州大學(xué)-詹姆斯·布

1、CHAPTER 12The Phillips Curve and Expectations1QuestionsWhat is the Phillips curve?How has the natural rate of unemployment changed in the U.S. over the past two generations?What determines the expected rate of inflation?How can we tell how expectations of inflation are formed-whether they are static

2、, adaptive, or rational?2QuestionsHow useful is the aggregate demand-aggregate supply framework-the IS-LM model and the Phillips curve-for understanding macroeconomic events in the U.S. over the past two generations?How do we connect up the sticky-price model with the flexible-price model?3Okuns Law

3、Okuns law shows the relationship between the unemployment rate and real GDPor4The Three Faces of Aggregate SupplyAggregate supply relates the price level to the level of real GDPAggregate supply can also relate the inflation rate to the level of real GDPUsing Okuns law, aggregate supply can also rel

4、ate the inflation rate to the unemployment ratethis relationship is known as a Phillips curve5The Phillips CurveAggregate supply can relate the inflation rate to the level of real GDPThe right-hand side of this equation can be substituted into Okuns Law6The Phillips CurveLetting =2.5/, we get the Ph

5、illips curveTo allow for supply shocks, we will add an extra term to the Phillips curve (s)7Figure 12.1 - The Phillips Curve8Figure 12.2 - Three Faces of Aggregate Supply9The Phillips CurveThe slope of the Phillips curve depends on how sticky prices and wages arethe stickier are wages and prices, th

6、e smaller is parameter , and the flatter is the Phillips curveWhen the Phillips curve is flat, even large changes in the unemployment rate have little effect on the price level10The Phillips CurveWhenever unemployment is equal to its natural rate, inflation is equal to expected inflationthe position

7、 of the Phillips curve can be determined if we know the natural rate of unemployment and the expected inflation rate11The Phillips CurveThe Phillips curve shifts if either expected inflation or the natural rate of unemployment changes or if a supply shock occursa higher natural rate moves the Philli

8、ps curve to the righthigher expected inflation moves the Phillips curve upadverse supply shocks move the Phillips curve up12Figure 12.3 - Shifts in the Phillips Curve13Aggregate DemandThe aggregate demand function developed in Chapter 11 shows how real GDP relates to the inflation rateWe can use Oku

9、ns Law to develop an aggregate demand equation with unemployment on the left-hand side14Aggregate DemandThe parameter is the product of three thingshow much the central bank raises the real interest rate in response to inflationhow much real GDP changes in response to a change in the real interest r

10、atehow large a change in unemployment is produced by a change in real GDP15Equilibrium Levels of Inflation and UnemploymentTogether, the unemployment form of the aggregate demand relationship and the Phillips curve equation allow us to determine what the inflation and unemployment rates will be in t

11、he economythe economys equilibrium is where the two curves cross16Figure 12.4 - Equilibrium Levels of Unemployment and Inflation17EquilibriumThe economys equilibrium inflation and unemployment rates depend onthe natural rate of unemployment (u*)the expected rate of inflation (e)supply shocks (s)the

12、level of unemployment when the real interest rate is at what the central bank thinks is its long-run average (u0)the central banks target level of inflation ()18Solving for EquilibriumTo solve for the equilibrium unemployment rate, substitute the Phillips curve equation into the monetary policy reac

13、tion function19Solving for EquilibriumTo solve for the equilibrium inflation rate, substitute the monetary policy reaction function into the Phillips curve20A Decrease in ExportsIf export demand falls, and the central bank does nothing, u0 will rise by u0The effect on the equilibrium level of unempl

14、oyment will beThe effect on the equilibrium level of inflation will be21Figure 12.5 - Effects of a Fall in Exports22The Natural Rate of UnemploymentUnemployment cannot be reduced below its natural rate without accelerating inflationIf the natural rate of unemployment is high, expansionary fiscal and

15、 monetary policy are largely ineffective as tools to reduce unemploymentMost estimates of the current natural rate in the U.S. lie between 4.5 and 5.0 percent23Figure 12.6 - Fluctuations in Unemployment and the Natural Rate24The Natural Rate of UnemploymentFour sets of factors influence the natural

16、rate of unemploymentdemographythe relative age and educational distribution of the labor forceinstitutionslabor unions, worker mobility, taxesproductivity growthwage growthpast levels of unemployment25Figure 12.7 - Real Wage Growth Aspirations and Productivity26Expected InflationThe natural rate of

17、unemployment and expected inflation together determine the position of the Phillips curvehigher expected inflation moves the Phillips curve upward27Expected InflationThere are three basic scenarios for how inflation expectations are formedstatic expectationsprevail when people ignore the fact that i

18、nflation can changeadaptive expectationsprevail when people assume the future will be like the recent pastrational expectationsprevail when people use all the information they have as best they can28The Phillips Curve under Static ExpectationsIf inflation expectations are static, expected inflation

19、never changesthe trade-off between inflation and unemployment will not change from year to yearIf inflation has been low and stable, businesses will probably hold static inflation expectations29Figure 12.9 - Static Expectations of Inflation30Static Expectations of Inflation in the 1960sIn the 1960s,

20、 the Phillips curve did not shift up or down in response to changes in expected inflationwhen unemployment was above 5.5%, inflation was below 1.5%when unemployment was below 4%, inflation was above 4%The economy moved along a stable Phillips curve31Figure 12.10 - Static Expectations and the Phillip

21、s Curve, 1960-196832The Phillips Curve under Adaptive ExpectationsIf the inflation rate varies too much for workers and businesses to ignore it and if last years inflation rate is a good guide to inflation this year, individuals are likely to hold adaptive expectationsinflation will be forecasted by

22、 assuming that this year will be like last yearforecast will be good only if inflation changes slowly33The Phillips Curve under Adaptive ExpectationsThe Phillips curve can be writtenThe Phillips curve will shift up and down depending on whether last years inflation was higher or lower than the previ

23、ous yearsinflation accelerates when unemployment is less than the natural rate34Adaptive ExpectationsExamplethe government pushes the unemployment rate down 2 percentage points below the natural rate=1/2last years inflation rate = 4%This years inflation rate = 4+1/22=5Next years inflation rate = 5+1

24、/22=6And so on35Figure 12.11 - Accelerating Inflation36Adaptive Expectations and the Volcker DisinflationAt the end of the 1970s, expected inflation gave the U.S. an unfavorable short-run Phillips curve trade-offBetween 1979 and the mid-1980s, Fed chairman Paul Volcker reduced inflation from 9 to 3

25、percent per yearThe fall in inflation triggered a fall in expected inflationthe Phillips curve shifted down37Figure 12.12 - The Phillips Curve before and after the Volcker Disinflation38The Phillips Curve under Rational ExpectationsIf the economy is changing rapidly enough that adaptive expectations

26、 lead to large errors, individuals will switch to rational expectationsPeople form their forecasts of future inflation not by looking backward but by looking forwardthey look at what current and expected government policies tell us about what inflation will be39The Phillips Curve under Rational Expe

27、ctationsThe Phillips curve will shift as rapidly as changes in economic policy that affect aggregate demandAnticipated changes in economic policy turn out to have no effect on the level of production or employment40Government Policy to Stimulate the EconomySuppose that the unemployment rate is equal

28、 to its natural rate and inflation is equal to expected inflationThe government takes steps to stimulate the economy by cutting taxes and raising government spending to reduce the unemployment rate below the natural rate41Figure 12.13 - Government Attempts to Stimulate the Economy42Government Policy

29、 to Stimulate the EconomyIf the policy comes as a surprise, the economy moves up and to the left along the Phillips curve in response to the change in government policyUnemployment will be lower, production will be higher, and the rate of inflation will be higher43Figure 12.14 - Results if the Shift

30、 in Policy Comes as a Surprise44Government Policy to Stimulate the EconomyIf the policy is anticipated, individuals will take the policy into account when they form their expectations of inflationThe Phillips curve will shift upThere will be no effect on unemployment or outputThe rate of inflation w

31、ill rise45Figure 12.15 - Results if the Shift in Policy Is Anticipated46What Kind of Expectations Do We Have?If inflation is low and stable, expectations are probably staticIf inflation is moderate and fluctuates slowly, expectations are probably adaptiveWhen shifts in inflation are clearly related

32、to changes in monetary policy, swift to occur, and large enough to seriously affect profitability, expectations are probably rational47From the Short Runto the Long RunIn the case of an anticipated shift in economic policy under rational expectations, the long run is nowIn the absence of supply shoc

33、ksIf expectations are rational and changes in policy foreseen, expected inflation will be equal to actual inflation and unemployment will be at its natural rate48Figure 12.16 - Rational Expectations: The Long Run Is Now49From the Short Runto the Long RunIf expectations are adaptive, the economy will

34、 approach the long run graduallyan expansionary shock will lower unemployment, increase real GDP, and lead to an increase in the inflation rateindividuals will raise their expectations of inflation in the next periodsas time passes, the gaps between actual unemployment and its natural rate and actua

35、l and expected inflation will shrink to zero50Figure 12.17 - Adaptive Expectations Convergence to the Longer Run51From the Short Runto the Long RunUnder static expectations, the long run never arrivesthe gap between expected and actual inflation can grow arbitrarily large as different shocks hit the

36、 economyif the gap between actual and expected inflation becomes large, individuals will not remain so foolish as to retain static expectations52Chapter SummaryThe location of the Phillips curve is determined by the expected rate of inflation and the natural rate of unemployment (and possibly by cur

37、rent, active supply shocks)in the absence of current, active supply shocks, the Phillips curve passes through the point at which inflation is equal to its expected value and unemployment is equal to its natural rate53Chapter SummaryThe slope of the Phillips curve is determined by the degree of price stickiness in the economythe more sticky are prices, the flatter is the Phillips curveThe natural rat