Vice versa origin6/6/2023 ![]() The concept behind the Phillips curve states the change in unemployment within an economy has a predictable effect on price inflation. Understanding the Phillips curve in light of consumer and worker expectations, shows that the relationship between inflation and unemployment may not hold in the long run, or even potentially in the short run.The Phillips curve was a concept used to guide macroeconomic policy in the 20th century, but was called into question by the stagflation of the 1970's.Higher inflation is associated with lower unemployment and vice versa. The Phillips curve states that inflation and unemployment have an inverse relationship.
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