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Lecture 3

ECN 600 Lecture Notes - Lecture 3: Labour Market Flexibility, Real Interest Rate, Aggregate Supply


Department
Economics
Course Code
ECN 600
Professor
Leo Michelis
Lecture
3

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Chapter 11: The Philips Curve and Expectaons
OKUN’s Law
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ou – u* = -0.6 x (Y – Y*/ Y*)
o(Y – Y*/ Y*) = - 1.7 x (u-u*)
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π = πe – 1.7/ θ x (u –u*)
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5%u = u0 Φ’ x (π – π’)
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