Assume that the economy is at a long-run equilibrium, with
unemployment at 5%, and inflation at 2% pa. Suppose a shock causes
a very large increase in the cost of crude oil and gas. Assume that
Ireland does not produce any oil or gas, and imports large amounts
of oil and gas. The shock causes unemployment to rise to 9%, and
inflation to rise to 4% pa. Using the data, write out the equation
of the Phillips curve before, during,...