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Ouput, Inflation, and Unemployment

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Monetary policymakers are concerned with the relationships among real GDP, the unemployment rate, and inflation. Information about these relationships can be uncovered by separating the data into two distinct components: trend and cyclical. The trend component can be defined by statistical techniques that draw a smooth line through the central tendency of the data. The cyclical component is then measured as the deviation of the variable from its trend.

Suggested citation: “Ouput, Inflation, and Unemployment,” Federal Reserve Bank of Cleveland, Economic Trends, no. 96-10, pp. 03-05, 10.01.1996.

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