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BPEA Article

The Distributional Effects of Higher Unemployment

Abstract

THE RECENT BURST of inflation in the American economy has made the problem of reconciling full employment with price stability all the more difficult. While few doubt that a sufficiently long period of high unemployment will eventually dampen inflation, many fear the social consequences of this unemployment. Not only would the losses in national income be large, but also they could be concentrated among the low- and middle income families who can least afford them.

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