A Quote by Paul Ormerod
In most Western economies, the general relationship is not in fact between the rate of inflation and the level of unemployment, but between the rate of change of inflation and the rate of change of unemployment.
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Significant changes in the growth rate of money supply, even small ones, impact the financial markets first. Then, they impact changes in the real economy, usually in six to nine months, but in a range of three to 18 months. Usually in about two years in the US, they correlate with changes in the rate of inflation or deflation."
"The leads are long and variable, though the more inflation a society has experienced, history shows, the shorter the time lead will be between a change in money supply growth and the subsequent change in inflation.
When you are growing at a rapid rate, there is bound to be some inflation. I think a 5% rate of inflation is something that we should take in our stride.
They flooded liquidity in the marketplace but the mortgage rate is based much more on expectations of inflation. So if the average investor believes that there is inflation coming, they'll move that rate up.
The black unemployment rate has to be twice that of the white rate in the US. If the national unemployment rate were 6.8 percent, everyone would be freaking out. We ought to not take too much solace in the 6.8 percent, but ask ourselves what can we do to bring that down to white rates, which are below 4 percent now. Some of that has to do with education, but that's just part of the story. You find that those unemployment differentials persist across every education level. I think it means pushing back on discrimination and helping people who can't find work get into the job market.
I can't possibly predict precisely what the unemployment rate will be at the end of one year. I can tell you that over a period of four years, by virtue of the policies that we'd put in place, we'd get the unemployment rate down to 6%, and perhaps a little lower.
Well, our economy is very strong and growing. We have created 5.4 million new jobs in the last 3 years. Our unemployment rate is better than the average unemployment rate of the 1960s, 1970s, 1980s, and 1990s.
We don't have a major problem right now in our country, and life is normal. Things like unemployment, which the youth are suffering from, and the rate of inflation - these are chronic conditions and we have to solve them.
Generous unemployment benefits can increase both structural and frictional unemployment. So government policies intended to help workers can have the undesirable side effect of raising the natural rate of unemployment.
In Michigan, in the mid-'80s, the unemployment rate goes way up because a lot of factories shut down. And then, the mid-2000s, to pick a date, the unemployment rate in Michigan isn't that much higher than in the rest of the country. But the main way that happened is people moved.
If unemployment could be brought down to say 2 percent at the cost of an assured steady rate of inflation of 10 percent per year, or even 20 percent, this would be a good bargain.
Once the true relationship between inflation and unemployment is understood, with luck and skill, a free lunch is possible.
To reduce repossessions caused by unemployment, Gordon Brown needs to look at cutting the rate of corporation tax for small companies to 20 per cent and the main rate to 25 per cent, while reducing the rate of employers' national insurance by 1% for the smallest companies.
People (a group that in my opinion has always attracted an undue amount of attention) have often been likened to snowflakes. This analogy is meant to suggest that each is unique - no two alike. This is quite patently not the case. People, even at the current rate of inflation - in fact, people especially at the current rate of inflation - are quite simply a dime a dozen. And, I hasten to add, their only similarity to snowflakes resides in their invariably and lamentable tendency to turn, after a few warm days, to slush.
The 'black rule' is that youth unemployment is, on average, double a country's unemployment rate.
My position is that the rate should align with the level of economic development. Because it is always about a balance, a balance of interests, and it should reflect this balance. A balance between those who sell something across the border and those who benefit from a low rate, as well as a balance between the interests of those who buy, who need the rate to be higher. A balance between national producers, for example, agricultural producers who are interested in it.
There is a big logical jump between acknowledging the destructive nature of hyperinflation and arguing that the lower the rate of inflation, the better.
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