Here is a nice set of charts that try to correlate inflation and unemployment in the states and see what best can be done now.
“The Federal Reserve is said to have a “dual mandate”: keeping inflation in check and the unemployment rate low. These measures, which tend to change cyclically and in concert with each other, are charted for every year since the Great Depression.
In speeches and in meetings, Ms. Yellen, the nominee for the next Fed leader, has commented on the Fed’s actions during significant periods, providing a window into her views and priorities.”
The question is can anything be predicted from these charts?
Is it that by keeping inflation low we can boost employment?
It is difficult to say since there seems to be no linear relationship between the two factors.
What is seen instead is the non-linear dynamic nature of both the parameters.
If so, what needs to be done is anybody’s guess.