People on the inflation-unemployment tradeoff

[phk]

http://www.nber.org/papers/w5539.pdf

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Shiller circulated a survey in 1996:

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[opebo]

#2.

[Inverted Things]

http://www.nber.org/papers/w5539.pdf

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Shiller circulated a survey in 1996:

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Right... 10% a month is a lot.  Totals out to 213% per year.  In other words, the question asked "Would you rather lose two-thirds of your money per year, or have 8 million extra unemployed."

If you make the alternative bad enough, people will take the unsavory-sounding option.

[opebo]

Right... 10% a month is a lot.  Totals out to 213% per year.  In other words, the question asked "Would you rather lose two-thirds of your money per year, or have 8 million extra unemployed."

If you make the alternative bad enough, people will take the unsavory-sounding option.

Yes, but remember, 90% of people have absolutely no money.

[Gustaf]

Right... 10% a month is a lot.  Totals out to 213% per year.  In other words, the question asked "Would you rather lose two-thirds of your money per year, or have 8 million extra unemployed."

If you make the alternative bad enough, people will take the unsavory-sounding option.

Yes, but remember, 90% of people have absolutely no money.

Do you have a source for this claim that 90% of "people" have not just little money or no money but "absolutely no money"? Or are you just making it up, per usual?

Anyway, the trade-off might reflect the empirics of what kind of inflation is required to drive down unemployment like that. Of course, the dichotomy is false anyway since high inflation, if anything, pushes up unemployment in the long run.

[opebo]

Do you have a source for this claim that 90% of "people" have not just little money or no money but "absolutely no money"? Or are you just making it up, per usual?

In all seriousness, do you have no awareness of or contact with the world around you?  Just go outside and observe - most people have no money, except for their pay.

[WillK]

Shiller circulated a survey in 1996:

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Interesting that this was considered an extreme possibility at the time.

[Beet]

2008 crisis or no, 10% inflation per month is far more extreme than 9% unemployment. We had 9% unemployment in 1982, but the highest inflation has been about 14% per year.

My personal indifference curve would have more like 4% ump, 10% annual inflation, and 9% ump, 2% annual inflation as points on the line... keeping in mind that ump is unusually brutal in the US. If it was France, it would be more like 4% ump, 10% annual inflation is equal to 20% ump, 2% annual inflation.

[Gustaf]

Do you have a source for this claim that 90% of "people" have not just little money or no money but "absolutely no money"? Or are you just making it up, per usual?

In all seriousness, do you have no awareness of or contact with the world around you?  Just go outside and observe - most people have no money, except for their pay.

I'm going to interpret that as "no" and "yes" respectively.

(and I can answer yes and no to your explicit and implicit questions)