Title: How Unemployment and Inflation Affect the Dollar Exchange Rate | American Express
Headings: 
How the Unemployment Puzzle Could Affect the Dollar Exchange Rate
Unemployment, Inflation, and the Dollar’s Exchange Rate
How the Phillips Curve Determines the ‘Neutral’ Rate of Unemployment
Unemployment, Under-Employment and Participation Rates
Longer-Term Trends May Permanently Change the Unemployment-Inflation Relationship
The
Takeaway:
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Content: He says that the unemployment rate is determined by psychological factors—what the famous economist John Maynard Keynes called “animal spirits”—and varies considerably. In his analysis, he replaces the Phillips Curve with a “belief function,” in which expectations of future GDP drive the decisions of firms and households. In simple terms, Farmer’s model says that if people believe future GDP will be low, it will be low, and unemployment will remain high. 19 The implication is that there may be little relationship between unemployment, inflation, and the exchange rate. The
Takeaway: The Phillips Curve relationship between unemployment and inflation appears to be weaker than before the crisis. This may be a temporary pr