ERIC Number: ED053397
Record Type: RIE
Publication Date: 1971-May
Reference Count: 0
The Inflation-Unemployment Tradeoff and Public Employment. Working Papers.
Barth, Michael C.; Gramlich, Edward M.
The initial discussion focuses on the dilemma posed by the fact that inflation and unemployment cannot simultaneously be eliminated with the macro-economic policies alone. To opt for controlling inflation means a delay in dealing with an already serious poverty problem. Suggestions for dealing with the inflation-unemployment dilemma are classified into 2 groups: (1) those which seek to remove the causes; and (2) those which focus on the symptoms. This paper specifically addresses itself to the question of whether, in dealing with the symptoms via public employment programs, the dilemma is worsened. A simple derivation of the inflation-unemployment trade-off (known as the Phillips Curve) is presented. It is then used to analyze the potential effects of public employment on the trade-off. It is concluded that income guarantees do have inflationary costs; however, the authors do feel that, whenever possible, job vacancies should be filled via public employment programs. (TL)
Publication Type: N/A
Education Level: N/A
Authoring Institution: Office of Economic Opportunity, Washington, DC. Office of Planning, Research, and Evaluation.