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What Are Price Shocks? Why Were They Not Included in the Original

question 51

Essay

What are price shocks? Why were they not included in the original formulation of the Phillips curve? Why were they added to the modern Phillips curve?

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Definitions:

Share Value

The price at which a particular share of stock is traded on the market, determined by supply and demand.

Ex-dividend Date

The date on which a stock trades without its dividend, meaning that the seller is entitled to the dividend, not the buyer.

Regular Cash Dividend

A payment made by a company to its shareholders, usually in the form of cash, out of its profits or reserves on a regular basis, such as quarterly or annually.

Stock Price

The cost of purchasing a share of a company's stock, representing partial ownership in the company.

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