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The medium run model

Now we discuss the medium run model. We talk about how the labor market anchors the medium run equilibrium and how this impacts the whole economy. For this second chapter,you study the dynamics of the labor market (i.e. unemployment) and of inflation. You should also try your best to estimate a Phillips Curve for your country, for the time period that you are studying. What is the best way to visualize the PC in your case? And what information does this give us on the changes in your country from the beginning to the end of your time period? Again, note that is not an `exercise’ where you can google the correct answers. Think on your feet and get a bit practical, while reading the textbook for actual tips on the best ways to visualize the PC, and what this means for the coverging of the business cycle to the medium runpath.