This problem is however not new to regulators who have an interest in limiting both factors. This relationship between unemployment and inflation is shown in the Philips curve which is declining in the short term. There seems to be a clear inverse relationship between the two factors in the short term. (Brinner, 1999). However, this apparent relationship ceases in the long run with the two being more or less independent of each other. The Federal Reserve is thus acting on a well established economic theory that interventions aimed at countering inflation are only effective in the short term. Meltzer is ...
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