🚀 go-pugleaf

Here's an issue that I don`t see being discussed but seems pertinent to the
state of our economy today: the proper balance between inflation and
employment.

Economics seems dominated by two major philisophical camps with different
emphases and predictive powers but diametrically opposed outputs.

In one camp we find the Keynesians, who can reiliably stimulate growth, but at
the added expense of inflation.  Inflation is inefficient because at higher
levels, it confuses future price/cost levels in the market.

In the other camp we find non-Keynesians (Austrians, monetarists,
supply-siders) who can who can reliably  control inflation, but at a huge
expense of unemployment.  I believe that Blinder comments that if we ran the
economy at 5% unemployment rather than 7% for the last decade, we would have
produced approx $10K per capita more GNP.  This ignores the other significant
social costs (UI benefits, break-up of families, suicides, etc).  So high
levels of unemployment are also inefficient.

The exsistence of two confliciting curves implies simple math could find an
optimum operating point, if only we knew the shape of the curves.  At only 500K
jobs created in the last four years (all in the government sector) and 3%
inflation we must be far down the unemployment curve, implying stimulus would
be desireable.  Yet, as far as I can see, there is no consensus on this point.


This seems a rather basic question for economists to answer. (Yes I know about
the Phillips curve.  But what good is it if we can't know the shape of the darn
thing?  Furthermore, what about the shape of the other curve, the
inflationVSeffeciancy curve?  I've never even seen that one described
anywhere.)

Is there an answer?

steve soar