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The Costs of Inflation and Unemployment in Australia


  • Alex Joiner

    (School of Economics, La Trobe University)


This paper examines the costs of inflation and unemployment encountered in the post-war Australian economy. The analysis takes place under the assumption that a trade-off between inflation and unemployment has persisted over this period. The methodology encompasses estimates of Okuns coefficient and the sacrifice ratio, over varying time horizons, in order to examine the effect that each has on output. When compared, the evidence strongly suggests that, in terms of output lost, unemployment imposes a greater and more conspicuous cost to the economy than does inflation.

Suggested Citation

  • Alex Joiner, 2000. "The Costs of Inflation and Unemployment in Australia," Working Papers 2000.05, School of Economics, La Trobe University.
  • Handle: RePEc:trb:wpaper:2000.05

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    References listed on IDEAS

    1. Jeff Borland & Steven Kennedy, 1998. "Dimensions, Structure and History of Australian Unemployment," RBA Annual Conference Volume,in: Guy Debelle & Jeff Borland (ed.), Unemployment and the Australian Labour Market Reserve Bank of Australia.
    2. Don Harding & Adrian Pagan, 1999. "Knowing the Cycle," Melbourne Institute Working Paper Series wp1999n12, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne.
    3. Koenker, Roger, 1981. "A note on studentizing a test for heteroscedasticity," Journal of Econometrics, Elsevier, vol. 17(1), pages 107-112, September.
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    Unemployment; Inflation; Trade;


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