Gas Prices and the Phillips Curve
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Contends that the operations of the U.S. Federal Reserve cannot protect an economy from supply shocks. The increase in gas prices in the United States since 2002 has led to inflation that is not caused by an over-extended economy, and is therefore not able to be controlled without high levels of unemployment.
From the Paper:"The open market operations of central banks such as the Federal Reserve Bank of the United States or the European Central Bank of the countries in the European Union that adopted the Euro fine-tune their economies by controlling the money supply. The success of such measures is based upon the theory summed up in the Phillips curve that unemployment and inflation are inversely related. These measures cannot protect an economy from supply shocks, however. The increase in gas prices in the United States..."
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Gas Prices and the Phillips Curve (2008, December 01) Retrieved January 25, 2020, from https://www.academon.com/term-paper/gas-prices-and-the-phillips-curve-122431/
"Gas Prices and the Phillips Curve" 01 December 2008. Web. 25 January. 2020. <https://www.academon.com/term-paper/gas-prices-and-the-phillips-curve-122431/>