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Phillips Curve
(redirected from Phillips curves)

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Phillips Curve
A graph that supposedly shows the relationship between inflation and unemployment. It is conjectured that there is a simple trade-off between inflation and unemployment (high inflation and low unemployment, and low inflation and high unemployment). Named after A.W. Phillips. Obviously, the relation between these important macroeconomic variables is more complicated than this simple graph would suggest. For a modern treatment, see work of Robert Lucas.
Phillips Curve
A curve postulating an inverse relationship between inflation and unemployment. That is, the Phillips curve theorizes that when inflation is low, unemployment is high and vice versa. This was a predominant theory for much of the mid-20th century until stagflation (high unemployment and high inflation) began to occur in the 1970s. Few economists use the Phillips curve today though it is a component in Gordon's triangle model.
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Also, the NKPC implies that inflation depends on real marginal cost, and not directly on either the gap between actual output and potential output or the deviation of the current unemployment rate from the natural rate of unemployment, as is typical in traditional Phillips curves (Walsh 2003).
The New Keynesian Phillips Curve and lagged inflation: a case of ... by Hall, Stephen G.; Hondroyiannis, George; Swamy, P.A.V.B.; Tavlas, G.S. / Southern Economic Journal
Phillips curves, expectations of inflation and optimal employment over time.
The applicability of the short-run Phillips curve to Namibia by Ogbokor, Cyril A. / Journal of Social Sciences
Sticky information yields the empirically-observed long lags of response of income to changes in monetary policy (Friedman (1948) and Romer and Romer (1989)); it is consistent with the surprisingly slow response of inflation to shocks found in estimates of Phillips Curves (Gordon (1997)); and it fails to yield the theoretical perversity in rational expectatio ns staggered contract models of deflationary policies that lead to increases, not decreases in output (Ball (1994)).
Behavioral macroeconomics and macroeconomic behavior by Akerlof, George A. / American Economist
 
 
 
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