A supposed inverse relationship between the level of unemployment and the rate of inflation.
- Clearly, the linear relationship between unemployment and inflation posited by the Phillips curve does not hold.
- The Phillips curve over-predicted wage gains, let alone unit costs and inflation.
- Moreover, Keynesian explanations for inflation turned heavily on the Phillips curve, which postulated an inverse correlation between the level of unemployment and the rate of inflation.
1960s: named after Alban W. H. Phillips (1914–75), New Zealand economist.
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