Relation Between Inflation Rate and Unemployment

The rate of Spaniards with jobs have become low during the previous years. According to DW English, in a Spanish town it has an equivalent of 80% unemployed. But that is only in one town this shows that as whole country if we calculate the population of Spain is 46.56 million and the total that are unemployed is 2 million people. The difficulties to get a job is twice as hard knowing there are not a lot of position available and most of them have been unemployed for more than one year. This statement shows us how much in Spain have unemployed people. Another difficulty is to get a job which as we can show that Spain doesn’t really help their people to find a job. With every day passing by their country is getting into more and more trouble. The unemployment and the falling value of dollar are the main concern of the government but the authorization prefer to avoid the problem than to face the fact. The media is also involve in it, they are forced to stop showing the real economic situation to the people. But if we look back, it not only one town that has unemployment, in the 2017 Index of Economic

The recession of 2007-8 resulted in the great number of unemployment as illustrated previous by the DKs curve that suggested an increase in unemployment leads to decreased inflation (Arnold, 2010). Many people become jobless as the banks and other financial institutions started focusing over injecting money into the economy. This problem was to be corrected by reducing government expenditure. By doing so many people lost jobs and employment was greatly reduced.

If someone were ill, where would that person go? What would that person do? Most people would rest, take medication, and most importantly see a doctor; doctors help people get back on their feet. Similarly, an economist’s main job is to take certain measurements to ensure that the economy is on track, to help it from becoming “ill.” The most important of these measurements is economic growth. Constant growth keeps the nation’s per Capita GDP high and inflation at a healthy, manageable percentage. Unfortunately, while looking at the big picture, things can go overlooked or, in a worst case scenario, become skewed. Recessions can cause people to lose faith in economists, and economists can even lose their own optimism. The issues of inflation and minimum wage, as well as numerous other economic factors, could have massive ramifications upon our economy in the future decades to come.

On the contrary, the government can increase spending if a recession is close or already happening and can lead to increased employment nationally. The central bank’s monetary policy can help by varying interest rates. They can lower interest rates to increase spending and raise them to decrease spending. To decrease inflation, the banks can reduce the supply of money, therefore giving citizens the incentive to spend less money and in turn, reducing the inflation.

Now the conflict between inflation and unemployment is a little different. During a period of strong GDP growth, falling unemployment will create a demand-­‐pull and cost-­‐push inflation leading to a decline in the real purchasing power of money. There are policies designed to control demand-­‐pull or cost-­‐push inflation for example by reducing aggregated demand but may lead to a contraction of output and a rise in unemployment. Similar to how inflation can conflict with unemployment, deflation may also lead to a rise in unemployment.

The relationship between inflation and unemployment is a topic, which has been debated by economists for decades. It is this debate that has made the opinions about it evolve. In this essay, the controversial topic will be discussed by viewing different economists’ opinions on that according to time sequencing.

The two periods of recession the focus for the analysis are July 1990 – March 1991 (recession one), March 2001 – November 2001 (recession two) and the recoveries for those recessions that will be the focus for the analysis are March 1991 – March 2001 (recovery one) and November 2001 – December 2007 (recovery two). Through the analysis of the periods above by the five economic variables, the real Gross Domestic Product (GDPC1), the output gap, the civilian employment-population ratio (EMRATIO), the civilian unemployment rate (UNRATE), and all employees: total nonfarm payrolls (PAYEMS), the conclusion is that recession one was more severe and recovery one was more robust.

A Critical Literature Review Exploring how Unemployment in Europe has been Impacted Since the 2008 Economic Crisis

The unemployment rate is the percentage of people in the labour force who are without jobs and are actively seeking jobs.

Figures show that 21.651 million men and women in the EU-28, 16.634 million in the euro area, remained unemployed as of February of 2016 (ILO, 2016). The numbers show that Germany experienced a continuous decline leading to positive estimation of the unemployment condition. Compared with the prior year, the region experienced a fall of unemployment over 1, 000, 000 and more in the extended area (ILO, 2016).

The effects of hyperinflation is so rough that can lead to loss of many jobs, close down of many businesses and even hunger for below poverty class due to extreme rise of prices. Since the value of money has becoming less worth and people loss jobs then they also tend to spend and buy less and with this effect hyperinflation will be get even worse if product commodities demand in the market constantly decrease; suppliers also produce less since production cost is too high and product demand will eventually decrease.

This research project does also include quantitative secondary research methods, with statistics over the unemployment rate for all of the European countries. This is a research, which has already been carried out by EU.

Today on the 22nd of September, 2017, there was an abundance of news being released from the European Union, while The United States had minor news releases, that we believe were not as impacting.  The first news release that we want to speak about is the second speech from the European Central Bank’s President, Mario Draghi.  He spoke today in Ireland and his main topic of discussion was youth unemployment rate throughout the European Union.  This topic was not very impactful because he was reiterating facts that have already been stated.  We personally believe that he spoke on this topic to give the youth a more hopeful outlook on the

The report aims to analyze the global impact of the Eurozone crisis. The recent Eurozone crisis has affected all parts of the world and has shifted the balance of economy which has been highlighted in the report.

Focussing on the development from 2011 on, the first half of 2011 is marked of economic recovery, supported by market regulations like “Basel III” and the OeNB supplying large amounts of long-term liquidity, leading to a decreasing unemployment rate. In the second half of the year geopolitical tensions like an earthquake in Japan, growth in debt in several Euro countries, tensions in the bond and interbank market led to uncertainty in the global financial markets which negatively influenced the Austrian labour market pushing the unemployment rate on a level of 4.3%.