The Short-Run and Long-Run Relationship Between Unemployment and Inflation Unemployment and inflation are an economy’s two most important macroeconomic issues. The federal government’s fiscal policy and the Federal Reserve’s monetary policy try to maintain both a low unemployment rate around a natural rate and a low inflation rate around 2%. Evaluate the historical relationship between unemployment and inflation. (hint: You may start from A.W. Phillips’s finding of the relationship between unemployment and inflation.) Distinguish between the short-run and the long-run in a macroeconomic analysis. Why is the relationship between unemployment and inflation different in the short-run and the long-run? Assess the recent 20-year U.S. unemployment and inflation data. Do the current U.S. unemployment and inflation data confirm the short-run Phillips curve? Analyze why the recent 20-year U.S. unemployment and inflation data approves or disproves the short-run Phillips curve. Evaluate whether the Phillips curve can still validly resolve today’s issue of unemployment and inflation and forecast unemployment and inflation. Why or why not? Recommend any policy, method, or opinions for the current U.S. unemployment and inflation as a policy maker for either fiscal policy or monetary policy (or both). Must be eight to 10 double-spaced pages in length (not including title and references pages) and formatted according to APA.riting Center APA Style Must use at least five scholarly, peer-reviewed, and other credible source Please use two of the below. André, F., Cardenete, M. A., & Lima, M. C. (2012). Using a Cge model to identify the policy trade-off between unemployment and inflation. The efficient Phillips curve. Economic Systems Research, 24(4), 349–369. Baskaran, T. (2020). Fiscal interactions in the short and the long run: evidence from German reunification. Journal of Economic Geography, 20(3), 711–732. Fitzgerald, T., Holtemeyer, B., & Nicolini, J. P. (2013). Is there a stable Phillips curve after all? Regional analysis suggests a consistent inflation-unemployment trade-off (Links to an external site.). Economic Policy Papers, 13. Retrieved from https://www.minneapolisfed.org/research/economic-policy-papers/is-there-a-stable-phillips-curve-after-all Khan Academy. (2012, February 15). Phillips Curve | Inflation – Measuring the cost of living. [Video file]. Retrieved from https://www.youtube.com/watch?v=v7ZWTZ9NgU4 Lotterman, E. (2018, February 24). Real world economics: Bill Phillips’ curve still influential (Links to an external site.). Pioneer Press. Retrieved from https://www.twincities.com/2018/02/24/real-world-economics-bill-phillips-curve-still-influential Merler, S. (2017, November 21). Has the Phillips curve disappeared? (Links to an external site.) [Blog post]. Retrieved from http://bruegel.org/2017/11/has-the-phillips-curve-disappeared
