Scribd Logo
Upload

Welcome to Scribd!

  • Phillips Curve

    Uploaded by

    Lahari Dasari
    74 views4 pages
    The document discusses the Phillips Curve, which shows the relationship between unemployment and inflation. It introduces the concept of NAIRU (non-accelerating inflation rate of unemployment), which helped explain how stagflation could occur. There is a distinction made between the short-term Phillips Curve and the long-term one, with the long-term curve being vertical, meaning only one unemployment rate is consistent with stable inflation in the long run. Edmund Phelps won the Nobel Prize for distinguishing between the short-term and long-term Phillips Curves.

    Original Description:

    Copyright

    © Attribution Non-Commercial (BY-NC)

    Available Formats

    PPT, PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    Report this Document
    The document discusses the Phillips Curve, which shows the relationship between unemployment and inflation. It introduces the concept of NAIRU (non-accelerating inflation rate of unemployment), which helped explain how stagflation could occur. There is a distinction made between the short-term Phillips Curve and the long-term one, with the long-term curve being vertical, meaning only one unemployment rate is consistent with stable inflation in the long run. Edmund Phelps won the Nobel Prize for distinguishing between the short-term and long-term Phillips Curves.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPT, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as ppt, pdf, or txt
    74 views4 pages

    Phillips Curve

    Uploaded by

    Lahari Dasari
    The document discusses the Phillips Curve, which shows the relationship between unemployment and inflation. It introduces the concept of NAIRU (non-accelerating inflation rate of unemployment), which helped explain how stagflation could occur. There is a distinction made between the short-term Phillips Curve and the long-term one, with the long-term curve being vertical, meaning only one unemployment rate is consistent with stable inflation in the long run. Edmund Phelps won the Nobel Prize for distinguishing between the short-term and long-term Phillips Curves.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PPT, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as ppt, pdf, or txt
    of 4

    Phillips Curve

    To help protect your privacy, PowerPoint prevented this external picture from being automatically downloaded. To download and display this picture, click Options in the Message Bar, and then click Enable external content.

    Unemployment and Inflation the Phillips Curve

    NAIRU(non-accelerating inflation rate of unemployment) arose to explain how Stagflation could occur. The latter theory, also known as the natural rate of unemployment", distinguished between the "short-term" Phillips curve and the "long-term" one. The short-term Phillips Curve looked like a normal Phillips Curve, but shifted in the long run as expectations changed. In the long run, only a single rate of unemployment (the NAIRU or "natural" rate) was consistent with a stable inflation rate. The long-run Phillips Curve was thus vertical, so there was no trade-off between inflation and unemployment. Edmund Phelps won the Nobel Prize in Economics in 2006 for this.

    You might also like