Fluctuations

Stylized Facts IS-LM Labor Markets AS-AD

There is always a temporary trade-off between inflation and unemployment; there is no permanent trade-off. The temporary trade-off comes not from inflation per se, but from unanticipated inflation, which generally means from a rising rate of inflation.

— Milton Friedman

Economics 302: Macroeconomic Analysis

Aggregate Supply & the Phillips Curve

Background:

Blanchard, chapter 2 (pp. 31–35); chapter 7 (pp. 139–155); chapter 8 (pp. 165–183); chapter 21 (pp. 441–447).

Analysis:

Carl E. Walsh, "Nobel Views on Inflation and Unemployment," Federal Reserve Bank of San Francisco Economic Letter 97-01, January 10, 1997.
Kevin J. Lansing, "Can the Phillips Curve Help Forecast Inflation?" Federal Reserve Bank of San Francisco Economic Letter 2002-29, October 4, 2002.
"The Crude Art of Policymaking," The Economist, June 10, 2004. [PDF format]

In The News:

Lawrence Kudlow, "Mind the Output Gap?" The Wall Street Journal, Commentary, April 21, 2004.
G. Thomas Sims, "Europe Sees Limits on Growth," The Wall Street Journal, July 22, 2004.
Robert J. Samuelson, "Where's the Inflation in the U.S. Economy?" The Wall Street Journal, August 4, 2005.

Going Further:

David Altig, Terry Fitzgerald, and Peter Rupert, "Is Noninflationary Growth an Oxymoron?" Federal Reserve Bank of Cleveland Economic Commentary, May 1, 1997.
Brinner, Roger E. "Is Inflation Dead?" Federal Reserve Bank of Boston, New England Economic Review, January/February 1999, pp. 37–49.