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Specification:

  • Economic Fluctuations, Monetary Policy, Inflation

Click to read the article below and then answer the questions:

John Williams: ‘I don’t have a recession in my forecast. I have pretty slow growth’

  • How would John Williams rate the strength of the labor market? What data is he considering?

  • Consider this quote: 

“To get inflation all the way to 2 per cent, it will take not only getting the demand for labour further down but some increase in unemployment. My own forecasts would have the unemployment rate rising to around 4 per cent by the end of the year and getting up to 4.5 per cent by the end of next year.”

  • Why would an increase in unemployment decrease inflation?

  • Does unemployment need to increase to decrease inflation? Why or why not?

Ariel Slonim at MRU Econinbox

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