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pattydo t1_itlmi3x wrote

Reply to comment by Orangeflea215 in [OC] Inflation rate and nominal interest rate by giteam

Wouldn't a low interest rate with changing unemployment be a pretty decent indicator that the link isn't very strong?

>so it’s unlikely there’s any empirical evidence that an increase in unemployment won’t still have an impact on the inflation rate

It's not no impact, it's just a lot less of one than in the past.

>but is there any evidence that an increase in unemployment isn’t still linked to a decrease in the inflation rate

Yes. When unemployment spiked in ~2010 but inflation was at 1%

There's just so so much more monetary policy and economic forces that impact inflation these days.

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Orangeflea215 t1_itloxpl wrote

>Wouldn't a low interest rate with changing unemployment be a pretty decent indicator that the link isn't very strong?

You still haven’t understood my argument.

> Yes. When unemployment spiked in ~2010 but inflation was at 1%

I’m not sure what you meant to say but that’s perfectly in line with what the Phillips curve would suggest.

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