10-1: Inflation, Expected Inflation and Unemployment e We have already known the function in chapter 9 Pt= Pt(1+p)F(ut, z) e It will be convenient here to assume a specific form for the function F F(u1,2)=1-au+z e Replacing in the earlier equation gives t=Pe(1+p)(1-ut+2) 心 To continue 2003-7-202003-7-20 2 10-1: Inflation, Expected Inflation, and Unemployment We have already known the function in chapter 9: Pt = Pt e (1+μ) F (ut , z) It will be convenient here to assume a specific form for the function F: F (ut , z)= 1 - αut + z Replacing in the earlier equation gives: Pt = Pt e (1+μ)(1 - αut + z) To continue