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    UNEMPLOYMENT and INFLATION IS PRICE STABILITY and HIGH UNEMPLOYMENT COMPATIBLE?
    UNEMPLOYMENT and INFLATION IS PRICE STABILITY and HIGH UNEMPLOYMENT COMPATIBLE?
    UNEMPLOYMENT and INFLATION IS PRICE STABILITY and HIGH UNEMPLOYMENT COMPATIBLE?
    Ebook119 pages37 minutes

    UNEMPLOYMENT and INFLATION IS PRICE STABILITY and HIGH UNEMPLOYMENT COMPATIBLE?

    By Steve Dafoe

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    About this ebook

    History tends to repeat itself. In economics, past policy often works to help with current Inflationary and Unemployment problems. At the least, economic policy can show what not to do as well as what has worked in the past. This paper deals with the 1990’s effect of Inflation and Unemployment in Canada and serves as a template for Western central banks to use for the future.
    LanguageEnglish
    PublisherLulu.com
    Release dateAug 9, 2024
    ISBN9781304123725

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      Book preview

      UNEMPLOYMENT and INFLATION IS PRICE STABILITY and HIGH UNEMPLOYMENT COMPATIBLE? - Steve Dafoe

      UNEMPLOYMENT and INFLATION

      IS PRICE STABILITY and HIGH UNEMPLOYMENT COMPATIBLE?

      STEVE DAFOE

      COPYRIGHT PAGE

      UNEMPLOYMENT and INFLATION

      IS PRICE STABILITY and HIGH UNEMPLOYMENT COMPATIBLE?

      COPYRIGHT@2024 by Steve Dafoe

      ALL RIGHTS RESERVED

      EBOOK ISBN 978-1-304-12372-5

      Chapter 1: Introduction

      History tends to repeat itself. In economics, past policy often works to help with current Inflationary and Unemployment problems. At the least, economic policy can show what not to do as well as what has worked in the past. This paper deals with the 1990’s effect of Inflation and Unemployment in Canada and serves as a template for Western central banks to use for the future.  Perhaps nothing frustrates economists and politicians more than the never-ending fight to control unemployment and inflation. The simple reason being that the general populace understands the implications of these two areas better than any other area of economic theory. Because it gets them right where it hurts – in the pocket! Governments have fallen in many a country because of uncontrollable inflationary pressures coupled with a high unemployment rate.

      In this paper we will determine the causes and types of inflation and unemployment, and we will look at the traditional political and economic tools used to fight both. Also, we will look at other potential remedies for these problematic areas. My own opinions and thoughts are given throughout the paper on the ideas presented within.

      First, let’s determine what not only causes unemployment and inflation but what different types there may be.

      Chapter 2: Inflation

      Inflation may be defined as an increase in the general level of retail prices¹ because the Consumer Price Index (CPI) measures the monthly changes in retail prices in Canda, the CPI is regarded as a measure of inflation. The problems of inflation are many and affect individuals in different ways. Pensioners who are on fixed incomes are hurt by the lower purchasing power of their dollar over time. Increasing prices favor people who borrow money but do not favor these who lend it. This is because money paid back over time will buy fewer goods and services than the money initially borrowed could buy now. As an exporting country, Canda’s global position will be hurt by our rising prices. If products made in Canda have a high price tag intentionally, then we may have priced ourselves out of business. Importers of our products will shop elsewhere.

      Another fear is that prices may begin to rise so rapidly that it becomes more difficult to control the situation even with the economic tools now used. This rapid rise may lead to hyper-inflation which portrays the psychological effect on unions to demand more wages and benefits to offset increases in prices.²

      However, this will only spark off another round of general price increases themselves making for a vicious cycle that is hard to break. Ideally, our mixed economy in Canda would like a high level of employment and price stability³ in which the excesses of the business cycle are moderated. An increase in prices is usually associated with high employment.⁴ This has usually

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