Friedman Phelps Model

Without short-run Monetary Policy
Inputs
%
U (nat.)
%
π (e)
%
ε
decimal
β
Outputs (long-run)
%
U
%
π
With short-run Monetary Policy
Inputs
%
π
Short-run Output
%
U
Long-run Output
%
π (e)
%
U
%
π