Question

Someone explain the Phillips Curve to me? and non accelerating inflation rate of unemployment plss thanks

Answer 1

The Phillips curve is an economic concept which was given by A. W. Phillips . It tells us that inflation and unemployment have a stable and inverse relationship in general . The theory claims that with economic growth comes inflation because higher money supply or expansionary policy leads to economic growth and also inflation , which in turn should lead to more jobs and less unemployment . So when inflation increases , unemployment decreases . The curve is downward sloping .

NAIRU is defined as a specific level of unemployment in an economy that will not cause inflation to increase . If unemployment rate is at NAIRU , then inflation is constant . NAIRU is shown by the vertical long run Phillips curve . It is also called the equilibrium or natural state .