The Problem Of Inflation And Unemployment Essay

1107 Words Nov 30th, 2016 5 Pages
As the population ages, the inflation is less alternative to unemployment. In an aging society, the tolerance of inflation is at a lowland, the trade-off between inflation and unemployment changes in times, this will lead to a serious problem between inflation and unemployment which affects the choice made by central bank. For monetary policy, the relationship between inflation and unemployment has always been a bone of contention. The movements in population structure caused by labor supply, capital stock and the change of risk and return preference will whether affect the relationship between inflation and unemployment or lead to changes in macroeconomic policy trade-off balance. All of these are based on the long-term population structure change of the evolution of the fundamentals of medium and long-term task. Society faces a serious aging problem that will then brings a series of problems such as the shortage of labor, slower economic growth and financial stress.

According to Statistics Canada, there is a total of fifteen percent of people who are about to retire in the next 10 years. With the retirements of these baby boomers in Canada, the decreasing labour force may cause the reduction in technology development resulting in a negative productivity. Labor shortages will take a more serious issue in restricting Canadian’s economic development. “with the exit of workers from the labour force, it is extremely difficult to meet high rates of gross domestic product…

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