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Definition
| the time needed to identify a macroeconomic problem and assess its seriousness |
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Definition
| the time needed to decide what to do once a macro-economic problem has been identified |
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Term
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Definition
| the time needed to introduce a change in monetary or fiscal policy |
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Term
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Definition
| the time needed for changes in monetary or fiscal policy to affect the economy |
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Term
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Definition
| a school of thought that argues people form expectations based on all available information, including the likely future actions of government policy makers |
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Term
| Time-inconsistency problem |
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Definition
| when policy makers have an incentive to announce one policy to influence expectations but then pursue a difference policy once those expectations have been formed and acted on |
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Term
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Definition
| the announcement and execution of tough measures to reduce high inflation |
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Term
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Definition
| commitment of central bankers to keep the inflation below a certain rate for the next year or two |
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Term
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Definition
| a curve showing possible combinations of the inflation rate and the unemployment rate |
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Term
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Definition
| based on an expected inflation rate, a curve that reflects an inverse relationship between the inflation rate and the unemployment rate |
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Term
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Definition
| a vertical line drawn at the economy's natural rate of unemployment that traces equilibrium points that can occur when workers and employers have the time to adjust fully to any unexpected change in aggregate demand |
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Term
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Definition
| the natural rate of unemployment is largely independent of the stimulus provided by monetary or fiscal policy |
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