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The Price Of Unemployment And Inflation And Who Pays, Michael Borrero
The Price Of Unemployment And Inflation And Who Pays, Michael Borrero
The Journal of Sociology & Social Welfare
Since the early 1960's many economists and policy makers have contended that full employment and price stability are unattainable goals. Stimulated by the works of A. W. Phillips, a British economist, they have argued that there is an inverse relationship between inflation and unemployment; that is, as unemployment decreases, inflation increases. Phillips in his original article, "The Relationship between Unemployment and the Rate of Change in Money Wage Rates in the United Kingdom,"1 cautiously reasoned that when demand for commodities, services or labor was high relative to supply, prices increase. Increasing prices for labor draw out unemployed people into the …