Authors: Anindya Kumar Biswas
In this article, we derive relations between inflation and rate of unemployment for a set of economic systems, using a theoretical model developed under the spell of Maxwell’s electrodynamics. Inflation in a place, in the model, is proportional to the frequency of economic power flow to the place from outside. Rate of unemployment in that place is a power law function of the frequency. Relations are of power law types i.e. inflation varies inversely as a power of rate of unemployment. Consequently, we get a spectrum of inflationary exponents. Exponents obtained are 2/5, 2, 2/(5+4l), 6.7; 1/6, 1/4, 1/(2l+6), 0.26; 1/4, 1/2, 1/(2l+4), 0.61; -2/3, -2/7, 2/(4l-3), -0.2; 1, -1, 1/(2l+1), -0.4 respectively; where, l is a positive integer. We draw few representative Phillips curves i.e. graphs of inflation vs rate of unemployment, discuss about the consequences of the spectra and surmise about the relevance of CPI over WPI from the model.
Comments: 19 Pages. It's an application of a model of economics developed in analogy with theory of electrodynamics of physics
[v1] 2018-02-07 09:37:09
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