Unemployment Rate and Inflation

Justin Wolfers, assistant professor of political economy at the Stanford Graduate School of business discusses inflation and unemployment in his article titled, “ People prefer inflation to prospect of Job Loss”. What is inflation and unemployment rate? Inflation is the continual rise in the price level and the unemployment rate is the percentage of people in the economy who are willing and able to work but who are not working. Wolfers brings out many good points about our well being and personal psychological damage not due to inflation but due to the unemployment rate.
Surveys conducted from 16 different European countries regarding subjective well-being compared life satisfaction and happiness in these countries to the rates of inflation and unemployment. It was proven that rising joblessness is roughly five times more troubling to people than rising prices. In other words the unemployment rate rising one percentage point causes as much misery as the rate of inflation ...