Macroeconomic Theory Jeffrey Parker, Reed College Paper of the Week
Assigned paper
Sargent, Thomas J. 1982. The Ends of Four Big Inflations. In Inflation: Causes and Effects, edited by R. E. Hall. Chicago: University of Chicago Press. (Copy of the paper to be provided.)
Background
This paper is not technically difficult. It is largely empirical/historical with lots of tables and graphs whose details you need not memorize.
Questions for analysis
According to the modern (Friedman/Phelps) Phillips curve, under what conditions would we expect a reduction in inflation to be associated with an increase in unemployment? Under what conditions could it be accomplished without high unemployment?
In general terms, describe the four "big inflations" that Sargent studies. What underlying causes do they have in common? What halted them?
Given your answer to #1, how can we explain how unemployment and output responded to disinflation in these cases? Why was the unemployment response in these hyperinflations different from the response at the end of the not-so-big inflation in the United States in the 1980s? In comparing these cases, consider the roles of reforms to the currency or the central bank, reforms to fiscal policy, the credibility of these reforms, and the expectations of the population.