Apply the Principle: The Philips Curve Due in Week 7 worth 60 points

In the Ten Principles video, Dr. Todd Buchholz and Dr. Caroline Hoxby debated the very existence of the Phillips Curve.

Dr. Hoxby indicated she was taking bets that the Phillips Curve is alive and well. The problem may be that it moves around and possibly changes shape occasionally.

Policy makers like Congress and the Federal Reserve seek to steer the U.S. economy to a sweet spot where we have low unemployment and only moderate inflation. The Phillips Curve is supposed to describe the trade-off between inflation and unemployment. Does it?

Read the Business Insider article: Japan can help us better understand one of the biggest puzzles facing the US economy http://www.businessinsider.com/phillips-curve-us-japan-larry-hatheway-gam-2017-6

1. Using data from the Bureau of Labor Statistics, what is the current level of unemployment? Be sure to include the link to where you have found your information.

2. Using data from the Bureau of Labor Statistics, what is the current level of inflation? Be sure to include the link to where you have found your information.

3. Are these high or low compared to historical averages in the United States? 4. Should policy makers ignore the ‘historically observed Phillips Curve relationship’ and

push unemployment even lower? Explain your thoughts.

Apply the Principle: The Philips Curve

60 points Novice Competent Proficient

Using data from the Bureau of Labor Statistics, what is the current level of unemployment? 10 points

Answer is not

submitted or is

incorrect.

Answer is correct but

is not from the BLS.

Answer is correct.

Using data from the Bureau of Labor Statistics, what is the current level of inflation? 10 points

Answer is not

submitted or is

incorrect.

Answer is correct but

is not from the BLS.

Answer is correct.

Are these high or low

compared to U.S.

historical averages?

Answer is not

submitted or is

incorrect.

Answer is correct.

http://www.businessinsider.com/phillips-curve-us-japan-larry-hatheway-gam-2017-6

20 points

Should policy makers

ignore the ‘historically

observed Phillips

Curve relationship’

and push

unemployment even

lower? Explain your

thoughts.

20 points

Answer is not

submitted or is

incorrect.

Conclusion is logical

but the explanation is

incomplete.

Answer is correct.

Opinion is logical.

Explanation is

complete and well

thought out.

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