Journal article
Optimality on the short-run Phillips curve revisited
The American Economist (New York, N.Y. 1960), v 36(2)
20 Sep 1992
Abstract
The misery index criterion model was developed to explain the public's preference for having the inflation rate lower than the unemployment rate. This model clearly fails to explain the prevailing super high inflation rate in Latin American countries. An attempt is made to introduce a generalized weighted misery index and show that, by following the weighted misery-minimization process, the model can explain the Latin American experience and also include the US experience as a special case. The weighted misery (WM) index is defined as the weighted sum of the inflation and unemployment rates. The weights reflect the preferences of the policy maker, and their absolute size reflects the intensity of preferences. Minimizing WM with respect to either the unemployment rate or inflation rate yields an identical relationship between the optimal solutions of the unemployment rate and the inflation rate.
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5 citations in Scopus
Details
- Title
- Optimality on the short-run Phillips curve revisited
- Creators
- Bijou Yang
- Publication Details
- The American Economist (New York, N.Y. 1960), v 36(2)
- Publisher
- SAGE PUBLICATIONS, INC
- Resource Type
- Journal article
- Language
- English
- Academic Unit
- Economics (School of Economics)
- Scopus ID
- 2-s2.0-85020494120
- Other Identifier
- 991019340424104721