The Economic Perspective: “Has an Economic Rule Been Broken?”

I’m Mary Walden with economist MW welcoming you to the economic perspective.  Today’s program asks if an economic rule has been broken.  Mike, rules result from seeing consistent relationships happen.  Many areas of life have developed rules, and economics is no exception.  But I understand when long standing rule in economics is being re-evaluated.  What is it?

  1. Rule between the unemployment rate and the inflation rate
  2. Rule said can’t have low on both
  3. If unemployment rate falls, inflation rate will rise, and vice versa
  4. Reason – falling unemployment makes for tighter labor market and higher wage rates, which are a major factor in prices
  5. But aren’t seeing the rule now
  6. Two reasons
  7. Availability of foreign labor
  8. More technology – productivity
  9. I’m MW

Mary: And I’m Mary Walden for the Economic Perspective, an NC State Extension program from the Department of Agricultural and Resource Economic