NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

The Inexorable and Mysterious Tradeoff Between Inflation and Unemployment

N. Gregory Mankiw

NBER Working Paper No. 7884
Issued in September 2000
NBER Program(s):   EFG   ME

This paper discusses the short-run tradeoff between inflation and unemployment. Although this tradeoff remains a necessary building block of business cycle theory, economists have yet to provide a completely satisfactory explanation for it. According to the consensus view among central bankers and monetary economists, a contractionary monetary shock raises unemployment, at least temporarily, and leads to a delayed and gradual fall in inflation. Standard dynamic models of price adjustment, however, cannot explain this pattern of responses. Reconciling the consensus view about the effects of monetary policy with models of price adjustment remains an outstanding puzzle for business cycle theorists.

download in pdf format
   (235 K)

email paper

This paper is available as PDF (235 K) or via email.

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w7884

Published: Mankiw, N. Gregory. "The Inexorable And Mysterious Tradeoff Between Inflation And Unemployment," Economic Journal, 2001, v111(471,May), 45-61.

Users who downloaded this paper also downloaded these:
Klenow and Malin w15826 Microeconomic Evidence on Price-Setting
Ball and Mankiw w8940 The NAIRU in Theory and Practice
Mankiw and Reis w8290 Sticky Information Versus Sticky Prices: A Proposal to Replace the New Keynesian Phillips Curve
Benigno and Ricci w13986 The Inflation-Unemployment Trade-Off at Low Inflation
Gali and Gertler w7551 Inflation Dynamics: A Structural Econometric Analysis
 
Publications
Activities
Meetings
NBER Videos
Data
People
About

Support
National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us