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This whole discussion is important. To me the unemployment problem after a deep recession is resolved only as firms can establish for themselves where their new 'place' is in the economy. Disequilibrium throws everyone off and there is an uncertainty as to what a firm's prices and wages should be relative to all the other firms - who are trying to solve the same problems. Who goes first? Compared to what? Are our new prices too high or too low in this new environment? etc. The grind back to equilibrium, rather than a spring-back, is a testament to this process. The clearer the picture, the easier to make the 'right' decision in an ever-changing environment. Really don't need a Phillips curve at all. Just time.
Nice to see you posting Nick!

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