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optimizingthe maximization of society's economic welfare in respect of the macroeconomic objectives of FULL EMPLOYMENT, PRICE STABILITY, ECONOMIC GROWTH and BALANCE-OF-PAYMENTS EQUILIBRIUM.
The essence of this approach can be illustrated, to simplify matters, by reference to the PHILLIPS CURVE‘trade-off between unemployment (U) and inflation (I). The Phillips curve in Fig. 137 shows that as unemployment falls, inflation increases and vice-versa. See MACROECONOMIC POLICY, FIXED TARGETS, INTERNAL-EXTERNAL BALANCE MODEL.