Purchase Solution

historical inflation rates

Not what you're looking for?

Ask Custom Question

Due to historical differences, countries often differ in how quickly a change in actual inflation is incorporated into a change in expected inflation. In a country such as Japan that has had very little inflation in recent memory, it will take longer for a change in the actual inflation rate to be reflected in a corresponding change in the expected inflation rate. In contrast, in a country such as Argentina, one that has recently had very high inflation, a change in the actual inflation rate will immediately be reflected in a corresponding change in the expected inflation rate. What does this imply about the shortrun and long-run Phillips curves in these two types of countries?What does this imply about the effectiveness of monetary and fiscal policy to reduce the unemployment rate?

Purchase this Solution

Solution Summary

Expected inflation rate and effectiveness of monetary and fiscal policy

Solution Preview

The Phillips Curve describes the short-term trade-off between the rate of unemployment and the rate of inflation. When the public expects inflation there is a upward shift in ...

Purchase this Solution


Free BrainMass Quizzes
Economic Issues and Concepts

This quiz provides a review of the basic microeconomic concepts. Students can test their understanding of major economic issues.

Elementary Microeconomics

This quiz reviews the basic concept of supply and demand analysis.

Economics, Basic Concepts, Demand-Supply-Equilibrium

The quiz tests the basic concepts of demand, supply, and equilibrium in a free market.

Pricing Strategies

Discussion about various pricing techniques of profit-seeking firms.

Basics of Economics

Quiz will help you to review some basics of microeconomics and macroeconomics which are often not understood.