What the Fed Can Learn From Canada's Economy

The video explores the relationship between employment and inflation, focusing on Canada's labor market. It questions traditional measures like the unemployment rate and suggests the prime age employment to population ratio as a better indicator. The discussion highlights the lack of inflation despite tight labor markets in Canada, challenging the Phillips curve model. It also examines the inconsistencies in unemployment data and suggests focusing on employment growth rates to understand inflation dynamics.

What is the Phillips curve concept related to?

• The correlation between GDP and inflation

• The relationship between unemployment and inflation

• The connection between interest rates and inflation

• The link between government spending and inflation

Why is the prime age employment to population ratio considered a better measure?

• It better reflects labor market tightness

• It includes all age groups

• It focuses on part-time workers

• It accounts for seasonal employment

What is a key reason for inconsistencies in traditional unemployment measures?

• Variable inflation rates

• Inaccurate GDP data

• Fluctuating interest rates

• Inconsistent labor market participation

What might be a better indicator of inflationary pressures than unemployment rates?

• Interest rate changes

• Pace of job gains

• Consumer confidence

• Government spending

What is the preliminary finding about the correlation between unemployment rate and inflation?

• They are directly correlated

• They are inversely correlated

• They are not strongly correlated

• They are perfectly correlated