Answer to Question #77597 in Macroeconomics for Natalie
English is not my mother tongue please excuse any errors on my part. I live in Europe and in my country we have conservative and social political parties. When I looked through economic precedences, there was mentioned that right wing prefer reducing inflation and left reducing unemployment. Which one is better? In my opinion it is impossible to reduce inflation without reduce unemployment. If there is high unemployment country have to give planty of social benefits while employees are able to pay tax and stabilize society. So it is possible to reduce inflation without excessive focus on reduce unemplyment? Thank you for your response to my inquiry. I appreciate the information you have provided with.
The Phillips curve is a single-equation empirical model describing a historical inverse relationship between rates of unemployment and corresponding rates of rises in wages that result within an economy. Stated simply, decreased unemployment in an economy will correlate with higher rates of wage rises. So, it is impossible to decrease both inflation and unemployment in the short-run.