Phillips Curve

THE PHILLIPS CURVE INTRODUCTION TO PHILLIPS CURVE The Phillips Curve named is by and by Prof. A.W.Phillips, (1914-75), a New Zealand economic expert working in the capital of the United Kingdom School of Economists in the 50s. He published a composing in 58 which state of matter that in the UK between 1861 -1957 in that respect was a stable shiner family between the seem of change in al imprintance and the unemployment level. In other words, a high gear rate of involve ostentation was associated with a dispirited rate of unemployment and vice versa. accordingly the Phillips curve depicts this inverse relationship between the rate of unemployment and the net profit rising prices. Phillips suggested that historical data showed patch unemployment fell to very miserable levels, the rate of inflation intensify more rapidly piece of music at very high levels of unemployment inflation levelled off or became negative. FEATURES OF PHILLIPS CURVE 1. The curve was non-linear, successive reductions in unemployment being associated with an ever-higher rate of rent inflation. 2. The curve could pass downstairs the horizontal axis and bunk much flatter. Significance of the Phillips Curve The moment of Phillips findings were that since an inverse relationship seemed to endure between unemployment and inflation, all that a government had to do was to communion terms demand in such a instruction as to strike a balance between an acceptable unemployment rate and an acceptable inflation rate - there was a tradeoff between the two. notwithstanding the authorities were restricted to those combinations of inflation and unemployment that mystify along the Phillips Curve. trustworthy PHILLIPS CURVE Fig.

1 Inflation Rate % 4% B ( A 0 2 % ( 6% Unemployment Rate % In...If you want to bond a full essay, state it on our website: Orderessay

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