What does the Phillips curve signify? How do you reconcile the difference in the shape of the curve in the short run and the long run?
Introduction The Phillips Curve is an important concept in macroeconomics that shows the relationship between inflation and unemployment. Named after economist A.W. Phillips, the curve originally showed an inverse relationship between the two — as inflation increases, unemployment decreases, and vice versa. However, the shape and interpretation of the Phillips Curve differ in the short […]