Whats more important: Inflation vs. Unemployment
New Genoa
17-12-2004, 01:02
Whats more important? Controlling inflation or controlling unemployment? And a third option will not be provided, I want people to really think before they make a choice.
Whats more important? Controlling inflation or controlling unemployment? And a third option will not be provided, I want people to really think before they make a choice.
What do you mean by 'controlling'? Are we talking about either keeping inflation down or keeping unemployment at 5%, or trying to eliminate inflation/unemployment, screw the costs?
New Genoa
17-12-2004, 01:35
Depends on your perspective. You explain your position.
Strensall
17-12-2004, 01:53
I'd say controlling inflation. If you have low-ish unemployment, the unemployed can be supported by the vast majority of the employed. A country with no inflation would be great provided laws against ursury were brought in. A country with no unemployment would go bankrupt. Some unemployment is needed to keep the wages down and therefore keep the country being able to compete with other countries.
Crimson Sparta
17-12-2004, 02:07
Inflation is more controllable by the central bank than unemployment. An economy generally hovers around a natural unemployment rate, which can be lowered only with inflation that is generally unwanted by a central bank.
You and your pessimistic Keynesian economics! We can easily control them both!
Lacadaemon
17-12-2004, 08:37
No one on this board should discuss economics. Most avowed demand siders here turn out to be supply siders
Doesn't unemployment CAUSE inflation as less and less people are making money, so the government must continuously pay these people so they can live? Thus printing more money and rising inflation.
This is like post-WW1 Germany.
Lacadaemon
17-12-2004, 08:43
Doesn't unemployment CAUSE inflation as less and less people are making money, so the government must continuously pay these people so they can live? Thus printing more money and rising inflation.
This is like post-WW1 Germany.
No. It doesn't.
In no way whatsoever.
I'll take a deep breath. ARRRRRGGHHHHHHHHHH.
now tell me about the wage/price spiral. It is wrong also.
The Force Majeure
17-12-2004, 10:06
Whats more important? Controlling inflation or controlling unemployment? And a third option will not be provided, I want people to really think before they make a choice.
Ummm...I dunno...the government should do neither...
Ludite Commies
18-12-2004, 04:21
I just finished writing my final in introductory macro-econ and would like you to remind me what the wage price spiral is. Is it when you try to move to an inflation/unemp comb that isn't the optimum level and it causes both inflation to go up and unemployment to fall back to the optimum level?