SOURCE: Federal Reserve Bank of Richmond

October 01, 2007 12:39 ET

Richmond Fed's "Economic Quarterly" Examines the Relationship Between Inflation and Unemployment

"Inflation and Unemployment: A Layperson's Guide to the Phillips Curve" by Jeffrey M. Lacker and John A. Weinberg

RICHMOND, VA--(Marketwire - October 1, 2007) - A slowing economy and rising inflation are typically understood to require opposite policy responses: lowering the short-term interest rate to counter slower real growth while raising the rate to tame inflation. What, then, is the relationship between growth and inflation and how is it related to monetary policy? Jeff Lacker, Richmond Fed President, and John Weinberg, Research Director and Senior Vice President, explore this question by looking at the history of the Phillips curve -- the statistical relationship between inflation and unemployment.

You can find the full text of this article and others in the latest issue of "Economic Quarterly" at:

Also in the Summer 2007 issue:

--  "A Taylor Rule and the Greenspan Era" by Yash P. Mehra and Brian D.
--  "Quantitative Models of Sovereign Default and the Threat of Financial
    Exclusion" by Juan Carlos Hatchondo, Leonardo Martinez, and Horacio Sapriza
--  "Barriers to Foreign Direct Investment Under Political Instability" by
    Marina Azzimonti and Pierre-Daniel G. Sarte

The "Economic Quarterly" is a free publication containing economic analysis pertinent to Federal Reserve monetary and banking policy. For free copies or more information, contact the Federal Reserve Bank of Richmond's Public Affairs office at 804.697.7982.

The Federal Reserve Bank of Richmond is one of 12 District Reserve Banks that, together with the Board of Governors in Washington, D.C., make up the Federal Reserve System. The Richmond Fed serves the Fifth Federal Reserve District, which encompasses the District of Columbia, Maryland, North Carolina, South Carolina, Virginia, and most of West Virginia.

Contact Information

  • Contacts:
    John Weinberg
    Director of Research
    Federal Reserve Bank of Richmond

    Kay Haynes
    Managing Editor
    Federal Reserve Bank of Richmond Economic Quarterly
    Email Contact