[{"data":1,"prerenderedAt":523},["ShallowReactive",2],{"term:phillips-curve":3},{"term":4,"related":506},{"id":5,"title":6,"body":7,"category":487,"description":488,"extension":489,"faq":490,"meta":491,"navigation":492,"path":493,"related":494,"seo":499,"stem":500,"takeaways":501,"__hash__":505},"terms\u002Fterms\u002Fphillips-curve.md","Phillips Curve",{"type":8,"value":9,"toc":481},"minimark",[10,15,19,22,26,282],[11,12,14],"h2",{"id":13},"understanding-phillips-curve","Understanding Phillips Curve",[16,17,18],"p",{},"In 1958, A. W. Phillips found that years of low unemployment in the UK tended to have faster wage growth. Economists turned this into a trade-off between unemployment and inflation.",[16,20,21],{},"The 1970s showed the trade-off is not stable: when people expect higher inflation, the whole curve shifts up. 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",[27,286,288,302],{"className":287},[34],[27,289,291],{"className":290},[38],[40,292,293],{"xmlns":42},[45,294,295,299],{},[48,296,297],{},[51,298,53],{},[97,300,301],{"encoding":99},"\\pi",[27,303,305],{"className":304,"ariaHidden":105},[104],[27,306,308,311],{"className":307},[109],[27,309],{"className":310,"style":114},[113],[27,312,53],{"className":313,"style":120},[118,119]," is inflation, ",[27,316,318,336],{"className":317},[34],[27,319,321],{"className":320},[38],[40,322,323],{"xmlns":42},[45,324,325,333],{},[48,326,327],{},[59,328,329,331],{},[51,330,53],{},[51,332,65],{},[97,334,335],{"encoding":99},"\\pi^{e}",[27,337,339],{"className":338,"ariaHidden":105},[104],[27,340,342,346],{"className":341},[109],[27,343],{"className":344,"style":345},[113],"height:0.6644em;",[27,347,349,352],{"className":348},[118],[27,350,53],{"className":351,"style":120},[118,119],[27,353,355],{"className":354},[149],[27,356,358],{"className":357},[153],[27,359,361],{"className":360},[157],[27,362,364],{"className":363,"style":345},[161],[27,365,367,370],{"style":366},"top:-3.063em;margin-right:0.05em;",[27,368],{"className":369,"style":170},[169],[27,371,373],{"className":372},[174,175,176,177],[27,374,376],{"className":375},[118,177],[27,377,65],{"className":378},[118,119,177]," expected inflation, ",[27,381,383,396],{"className":382},[34],[27,384,386],{"className":385},[38],[40,387,388],{"xmlns":42},[45,389,390,394],{},[48,391,392],{},[51,393,82],{},[97,395,82],{"encoding":99},[27,397,399],{"className":398,"ariaHidden":105},[104],[27,400,402,405],{"className":401},[109],[27,403],{"className":404,"style":114},[113],[27,406,82],{"className":407},[118,119]," unemployment and ",[27,410,412,430],{"className":411},[34],[27,413,415],{"className":414},[38],[40,416,417],{"xmlns":42},[45,418,419,427],{},[48,420,421],{},[86,422,423,425],{},[51,424,82],{},[51,426,92],{},[97,428,429],{"encoding":99},"u_n",[27,431,433],{"className":432,"ariaHidden":105},[104],[27,434,436,440],{"className":435},[109],[27,437],{"className":438,"style":439},[113],"height:0.5806em;vertical-align:-0.15em;",[27,441,443,446],{"className":442},[118],[27,444,82],{"className":445},[118,119],[27,447,449],{"className":448},[149],[27,450,452,472],{"className":451},[153,244],[27,453,455,469],{"className":454},[157],[27,456,458],{"className":457,"style":251},[161],[27,459,460,463],{"style":254},[27,461],{"className":462,"style":170},[169],[27,464,466],{"className":465},[174,175,176,177],[27,467,92],{"className":468},[118,119,177],[27,470,268],{"className":471},[267],[27,473,475],{"className":474},[157],[27,476,478],{"className":477,"style":275},[161],[27,479],{}," the natural rate.",{"title":482,"searchDepth":483,"depth":483,"links":484},"",2,[485,486],{"id":13,"depth":483,"text":14},{"id":24,"depth":483,"text":25},"economy","The short-run trade-off between unemployment and inflation.","md",[],{},true,"\u002Fterms\u002Fphillips-curve",[495,496,497,498],"natural-rate-of-unemployment","stagflation","rational-expectations","inflation",{"title":6,"description":488},"terms\u002Fphillips-curve",[502,503,504],"Lower unemployment tends to come with higher inflation in the short run.","The trade-off shifts with inflation expectations.","In the long run there is no lasting trade-off.","NuoJp-GALx_5Z9bqMDVOrlyW9qZUGRG1LRvTrXrf2Kg",[507,511,515,519],{"title":508,"description":509,"path":510},"Inflation","The rate at which the general level of prices rises, eroding purchasing power.","\u002Fterms\u002Finflation",{"title":512,"description":513,"path":514},"Natural Rate of Unemployment","The unemployment rate that persists when the economy is at full strength, also called the NAIRU.","\u002Fterms\u002Fnatural-rate-of-unemployment",{"title":516,"description":517,"path":518},"Rational Expectations","The assumption that people use all available information to forecast the future without systematic errors.","\u002Fterms\u002Frational-expectations",{"title":520,"description":521,"path":522},"Stagflation","High inflation combined with slow growth and high unemployment.","\u002Fterms\u002Fstagflation",1793374005625]