Evidence suggests that productivity would be much higher and unemployment much lower if the supply of and demand for …

of slow productivity growth and high unemployment in industrial countries. We show that introducing nominal price … inflation is relatively high, as was the case in the 1970s. In general, the sign of the effect of growth on unemployment is … shown to depend on the level of steady-state inflation. There is a threshold level of inflation below (above) which faster …

productivity growth and high unemplyoment. Subsequent research has shown that the standard model of unemployment actually gives … counterfactual predictions. Motivated by the observation that the 1970s were also characterized by high and rising inflation … the rate of inflation is high enough. There is a threshold level of inflation below which faster growth leads to higher …