Phillips curve | Inflation - measuring the cost of living | Macroeconomics | Khan Academy
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- Опубліковано 14 лют 2012
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The observation that inflation and unemployment tend to be inversely correlated
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You sir are incredible, I'm passing math because of you and now I can pass economics. What can't you do??
Celebrate 😜👍
Ohh thank you xoLaruhh😊👍
After eight years since your initial comment, have you pursued a career in economics? Are you currently employed in the field related to this topic? I'm kinda second guessing my study choices right now and just curious about your journey
@@samer9530😂😂😂 I finished my masters in Economics, only to work at Royal Bank of Canada (RBC), get carpel tunnel, fall into depression at my desk job and do a complete 180 and go into real estate (which economics has helped with)
All in all I did enjoy economics and would still advise to study it, I love the study. Just work-wise didn’t work out for me
THANK YOU! you have made it so simple, so reasonable.
Amazing class!!
You have the gift of simplification.....can't thank you enough for what you are doing with Khan Academy.
I regret that I didn't find that video to learn when I study phillip curve in macro course :(.
Thank you, Sir. Really well explained!!
This video is very relevant in 2022
Thank You For Making It Simple
Im just wondering...does this man know everything? He's helped me with series for AP calc bc and ap physics before, and macro too?!
It's not that hard to know a few first year university subjects well..
Sal actually spends a lot of time studying himself and learning the concepts well enough to teach others. This is his full time, so it makes sense that he knows "everything" :)
Central Banks and Politicians "love it" because it is true in the short run usually.
The Philips Curve is very useful.
It's well explained but I think it still lacks of information. How about the New Keynesian Philips Curve, New Classical version, and how the formula is..
how can this man know literally everthing?
Superb! Once again.
Visiting this in 2022, amazing how times repeat themselves lol
Thank you
thank you sir very helpfull
khan academy video on solow growth model please
Nicely explained.....
Thank you! Thank you! Thank you!
@RyogaShark,
Not necessarily "higher employment". If you have price floors on labor, you can have high demand and still high unemployment.
The problem with Keynesian economics is that Keynesians tend to lump people's economic decisions into simplistic categories. For instance, they would lump together all employment and all wages to determine an average wage, when in fact people work in very diverse and different fields, with different productivity outputs.
His voice is beautiful
i wish that i found you 2 weeks earlier ..
May God bless you man
Very nice explanation of what the philips curve is. However data does not support this in the US. Correlation between between unemployment rate and wage rise is less than 0.1%. Other data explains wage rise better.
CoooooooLLLLL VIDS!!!!
Nice one thats the inverse relationship ha, cool thanks
NICE
What about the natural rate? It should intercept the X axis.
Late 90s had super low oil prices and more cheap labor from China, both causing low inflation. In my view the Phillips curve only applies for products made within the country considered. For example, low unemployment in the healthcare industry has been causing health care costs to increase. Same for college education (high demand, low supply). Foreign-made products that use foreign labor (where unemployment is high and wages $1 per hour) will experience low inflation when imported to the u.s. and confuse the u.s. economists at the fed. Only when the dollar falls and/or oil prices rise, will we have more widespread inflation in the u.s.. Luckily for now, fracking oil locally has saved us from oil price inflation.
@RyogaShark,
"Higher employment is what causes Wages to rise."
No, it's higher demand for labor, not higher employment. You can still have raising wages with high unemployment, especially under artificial wage floors.
@Elmgren76 so true...
Economists have been trying their hardest to hit 2% inflation for decades. They have recently admitted to not having a working model to explain inflation. Economics is the antithesis to a science. It is a faith. What you are claiming is that the solution to inflation is to increase the price of banking (increase the interest rate) whereby increasing the cost of all goods and services and to increase unemployment. How exactly is increasing prices and unemployment going to fix inflation? Doesn't increasing prices and destitution increase prices... i.e. stagflation? What Volker did actually made it worse, it did not solve the issue. If one wants to solve inflation, one would have to address the actual cause of the inflation. Most often, in America, it's petroleum. The true cause of our current inflation problems is both petroleum shortages and disruptions in global and local shipment lines. (2022) One can easily blame Biden and one Mr Pete Buttigieg. Our problem is an over reliance on a single commodity and a globalized exchange market that is particularly susceptible to disruptions.
is this topic is of 11th class eco ??
if is then tell in which ch ??
Good yet incomplete video
Some segments in the video are stamped not adjacent to each other
someone explain the snapping back concept please
somebody know which program he use?
Wait.. are you saying... If things are less expensive people don't have to work as much and when they are more expensive people work more... SHOCKING
Inflation is always and everywhere a monetary phenomenon. -Milton Friedman
Because demand has to increase in response to the rise in the monetary base. Paul Krugman is probably the guy to read on Japan's lost decade.
we should make this guy president
If expansions in the money supply (inflation) inevitably cause price increases, then why has the central bank of Japan's trillion+ injection into the financial system not caused run-away price increases? In fact, deflation and anemic inflation have remained persistent and this has plagued Japan's economy for over 2 decades.
I don't think you should have ended this lesson by simply stating that the Phillips Curve "could be generally true". If that were true there would not be a second version of the curve which is the one generally accepted nowadays. The modified version of the curve takes into account inflation expectations of the economic agents and a "natural" rate of unemployment. In short, the agents realize what's going on and the effect eventually fades away, bringing unemployment back to the natural rate.
Hold tight roadman
USYD ECOS 2002 **
Once the federal reserve raises interest rates or the government has to pay its debts the economy will just go back into recession
Indonesian subtitle please...
the dismal science
I have huge confusion about this... I think there is inverse relationship between money wage and unemployment or inverse relationship between money supply and unemployment.
The year is now 2018 this theory is turning out to be JUNK SCIENCE>
WRONG! Wages can't rise without can expansion of the money supply. Wages(the price of labor), like any other price, cannot rise because it is constrained by the amount of money that exists. Inflation just lowers real wages, as nominal wages stay the same with higher prices, and therefore it is the low wages that create higher employment.
I find it quite disturbing that this guy's voice is SO SIMILAR to Anthony Bourdain's... (RIP)
wat do the feds do with printing money! buy bonds hope banks lend?
has it happened ? no - has inflation gone up ? no
in theory it should raise inflation but its not happened
whats wrong with that ? it has not caused inflation here in uk - printing money has little impact on inflation
its a media overeaction
Guys, If demand increases won't the price fall?
No, the exact opposite. The higher the demand the higher the price. The lower the demand the lower the price.
@RyogaShark You don't understand basic economics. I recommend you learn from the best; Mises.org
I'm not thinking you watched the video.
printing money IS inflation. I really hope you were being sarcastic.
Khan. You might be a RON PAUL guy lol.
@Elmgreen76 pray tell
I don’t understand
TOO INSIGHTFUL
:D
hhhh
Unfortunately, this nice theory fell apart in the great stagflation. Sorry. But the theory is wrong.