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Japan can help us better understand one of the biggest puzzles facing the US economy





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A hotly debated topic on the US economy is the collapsed relationship between unemployment and inflation.

The traditional Phillips curve purports that when unemployment falls, inflation should rise, since more workers with jobs will increase demand in a stronger economy and that should lift prices.

But the US unemployment is at a 16-year low, and inflation is going nowhere.

Larry Hatheway, the chief economist at GAM, an asset manager with about $130 billion, looks to Japan as another case study.

“It’s been fashionable for 25 years or so to dismiss Japan,” Hatheway said at a media briefing on Wednesday.

“It’s read more >>>

Source:: BusinessInsider.Com

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