The Congressional Budget Office uses 5% as its estimate of the natural rate of unemployment. Most economists

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The Congressional Budget Office uses 5% as its estimate of the natural rate of unemployment. Most economists estimate that the natural rate is between 5% and 6%. However, some evidence suggests that the natural rate of unemployment may have increased after the recession of 2007–2009. If the Fed believed that the natural rate of unemployment was lower than the true rate and tried to maintain that rate, what would be the consequences for the economy?
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Macroeconomics

ISBN: 9780132109994

1st Edition

Authors: Glenn Hubbard, Anthony Patrick O'Brien, Matthew P Rafferty

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