Describe the short run trade-off between inflation and unemployment. Why is there not a long-run trade-off? How long do you think the short-run lasts? (Or do you believe there is a trade-off at all – many economists don’t. Why?
A shortrun trade-off happens when the economy comes closer to full employment, we also experience a rise in inflation, with the increase in real GDP, businesses take on more workers leading to a decline in unemployment this makes it to where we see a higher inflation and and lower rate in unemployment. This is something that does not really have a long run because it isn’t something that can last a long time because there will a point where some firms crash or experience a bad investment and that’s when things start to change there will always be a chance of unexplained reasons the economy has to change therefore not allowing for a long run trade off between both. I think that short-runs last a little while while they are trying to fix the economy and see that, that is about as far as they can go, or when they do the most within the economy.
Macroeconomics 