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This Concept Map, created with IHMC CmapTools, has information related to: Chapter 12 Stagflation, stagflation Because Participation Rate changes, Unemployment Short INcrease MS, INcrease MS Higher INflation, stagflation Because Inflation variability, higher wages to attract more workers at NRU Eventually Demand Higher wages to for higher prices, Back toUnemployemnt results stagflation, prices & Income Low inventory higher wages to attract more workers at NRU, stagflation Policy Recession, stagflation Because Labor Hoarding, Demand Higher wages to for higher prices Drop wages/workers Back toUnemployemnt, stagflation Because Supply Shock, stagflation Conditions High NRU, stagflation Conditions Current Fight Against inflation- creating a recession, stagflation Rising Unemployment, stagflation Policy Accelerationist Hypothersis Increase MS quick and fast to permanently reduce NRU, INcrease MS Higher prices & Income, stagflation Policy Expectations for inflation must be widely know that even in tyhe short term there exists no tradeoff, stagflation Because Increase Money Growth, stagflation Conditions Real Wage Overhang Workers don't allow their real wage to fall, stagflation Policy Reducing the NRU by alleviating imperfections in the labor market