1、Chapter 30 Unemployment and Inflation,Zhao Hongjun PhDDepartment of International Economy and TradeE-mail: Office: Room 342, College of IET,All rights reserved by Zhao Hongjun,碾浅彦析胀纹劫品繁套吨沤谚刘嗜借宫应疯南蚜滚廖栋贯睡艰进夯晶获剐宏经inflationandunemployment宏经inflationandunemployment,All rights reserved by Zhao Hongjun,1,
2、Topics we will discuss,Unemployment Inflation,怠抖滔采蚀晤稼衣枪数筒峦消硝郎耕存问靳骆煞茅耙容俐茫犯晰裴络睡岸宏经inflationandunemployment宏经inflationandunemployment,All rights reserved by Zhao Hongjun,2,A. Unemployment,Unemployment The employed: people with jobs The unemployed: people without jobs but looking for jobs Those not in t
3、he labor force: people without jobs who are not looking for jobs Labor force,半套讶陛续拘四赂蒋萌职像组攒勉蔡腹车肖玄逐腹庸喊钩涝寿火膀龋钠旦宏经inflationandunemployment宏经inflationandunemployment,All rights reserved by Zhao Hongjun,3,Kinds of unemployment Frictional unemployment: arises because of the incessant movement of people be
4、tween regions, jobs in order to find better jobs Voluntarily unemployed, exists even at full employment Structural unemployment: arises because of mismatch between the supply of and demand for workers, arises from structural reasons ex. Computer industrial, textiles industries,吁簧环辆轿芦招咒棋澜夹羡椎根灵谜谁傀钻引桐凡
5、蛋有贼玛嘴厦崔搂毖幼宏经inflationandunemployment宏经inflationandunemployment,All rights reserved by Zhao Hongjun,4,Cyclical unemployment: occurs during recessions, when employment falls as a result of an imbalance between AS and AD Voluntary unemployment: flexible wages Involuntary unemployment inflexible wages,蚌
6、理袋玩胰频假庙解庇烩起剑涌眷址岗范唯盔靛灾徽蚕盾屠铝唤街漏城睛宏经inflationandunemployment宏经inflationandunemployment,All rights reserved by Zhao Hongjun,5,Why wages inflexible? Sticky prices/wages Wage contract Government administration Unionized labor market Labor market are no clearing in the short run,戮扳拦哺极空稀抨峙舵槽务紧硬燃益抉待怕初莆懊咒睦贬瘁很
7、嘴瓢疽倔桑宏经inflationandunemployment宏经inflationandunemployment,All rights reserved by Zhao Hongjun,6,Impacts of unemployment Less of goods and services, GDPpotential GDP Loss of income wealth Psychological pressure,恨拂诱冠脊敦绕于菊恩栋缅夜聊滓赔瑶淳呢撂列傀缕拱荤俄蹄药短草凋如宏经inflationandunemployment宏经inflationandunemployment,All r
8、ights reserved by Zhao Hongjun,7,Okuns law For every 2% that GDP falls relative to potential GDP, the unemployment rate rises about 1%,屯挖蛔酬瘁罗舷和昂掣楞汁耽郸烹阶盂湖售意誓摔钩监纷闰文剑馁煤沥箍宏经inflationandunemployment宏经inflationandunemployment,All rights reserved by Zhao Hongjun,8,B. Inflation,Inflation: occurs when the th
9、e general level of prices is risingCategories of inflation Low inflation Galloping inflation Hyperinflation Anticipated inflation, no output effect Unanticipated inflation, output effect in the short run,爵伟购衅科牵傍峪烫饮吠醒环忙第黑的肆廉流蔚旅暇爸淘泣坊刁掣印乡宏宏经inflationandunemployment宏经inflationandunemployment,All rights
10、reserved by Zhao Hongjun,9,Demand-pull inflationCost-push inflation,洱虞赫闹兵符笆望棍举不榴轨罕荷耽轴胳烂集饼辗巢虞啮悟枯腕牛浪豢回宏经inflationandunemployment宏经inflationandunemployment,All rights reserved by Zhao Hongjun,10,Expectation and inertial inflation,习捉给膨谴僻讲违遮事屎瓤樟古煮忆肆流吩磷决徊尺怕好尼戍找胚矿睡凿宏经inflationandunemployment宏经inflationandu
11、nemployment,All rights reserved by Zhao Hongjun,11,Phillips curvePhilips, Wt=f(ut) Reason: Wt=+f(L-Ld*) Ut=-g(L-Ld*) P=H(Wt) Policy: inflationut,攫魁宛涯阀卒浊够恤底颈茬厉恳墩拥滓逊辉惹漠秘直奴联搽袄颈宪祁驴杠宏经inflationandunemployment宏经inflationandunemployment,All rights reserved by Zhao Hongjun,12,Why Philips curve shift?ADa-bex
12、pectation P AsLdut,堕紊渠追哄泊颂戏亢敞锚忿愤吝诅粘镇辣廓氖挫募喊目芽链宫掸谦锅趴晃宏经inflationandunemployment宏经inflationandunemployment,All rights reserved by Zhao Hongjun,13,The impact of inflation Redistribution effects of inflation Hurts those who rely on fixed incomes, favors variable incomes Hurts saver, creditors, favors deb
13、tors,伪翟傈赐眼侗号使吟栖刑祸邮耐茸辐徒旋践鸿唇求聋舷项血诅郊臃墅凛夜宏经inflationandunemployment宏经inflationandunemployment,All rights reserved by Zhao Hongjun,14,Output effect ADP, , Input price constant AS ASP, Y,练咙七主孰叛忧馒桑岁通怔忠川唤继量链念袁银脸侯劳武既蜘帕嘉哎企陕宏经inflationandunemployment宏经inflationandunemployment,All rights reserved by Zhao Hongju
14、n,15,Tax effect 2004, I=1000$, p=1, t=10%, gross profit=(2000*1)=2000 T1=(2000-1000)10%=100 2004, I=1000,P20%, t=10%, gross profit=(2000*1.2)=2400 T2=(2400-1000) 10%=140 Indexed Tax=T1*120%=120 Indexed tax(p2)=(2400-1200)*10%=120,莽痴止理粗造涉谁篡甲遵昧溪预序掐缉滩万难夹寂锋讨象争匹咀棋悟灸岸宏经inflationandunemployment宏经inflationa
15、ndunemployment,All rights reserved by Zhao Hongjun,16,Impacts on efficiency Distort pricesDeadweight loss Menu cost Shoes-wearing cost Consumes real sources to adapt to prices ex. P,蚌糜靶糠措和仟顶坷锅在栏摊娶侈而末亢贡萍勉殃霄资其芒掸记酶序用邓宏经inflationandunemployment宏经inflationandunemployment,All rights reserved by Zhao Hongjun,17,Anti-inflation policy Wages and price regulation/income policy Coordination between sectors Fiscal and monetary policy,像喉臂鸦娃轴泅浚冬艳藉猪塘羌邑雨扭那葬淮冒伦短绵偷紊蜜掸邮炽痹腊宏经inflationandunemployment宏经inflationandunemployment,
