for the mild effects on inflation and economic activity of the recent increase in the price of oil: (a) good luck (i …

for the mild effects on inflation and economic activity of the recent increase in the price of oil: (a) good luck (i …

implications for the unemployment-inflation tradeoff and for the conduct of monetary policy.We proceed in two steps. We first leave … firms. We derive the relation between inflation and unemployment and discuss how it is influenced by the presence of labor … market frictions and real wage rigidities. We show the nature of the tradeoff between inflation and unemployment …