Phillips Curve
MacroDefinition
The historical inverse relationship between unemployment and wage/price inflation: when unemployment is low, inflation rises; when high, inflation falls. The cornerstone of central-bank thinking from the 1960s through ~2010.
Has flatlined dramatically since 2010 — low unemployment failed to spark inflation through the 2010s. Reasserted itself in 2021-2022 with the post-COVID labor shortages. Active debate among economists whether the Curve is structurally broken or just dormant.
Has flatlined dramatically since 2010 — low unemployment failed to spark inflation through the 2010s. Reasserted itself in 2021-2022 with the post-COVID labor shortages. Active debate among economists whether the Curve is structurally broken or just dormant.