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Economics
Phillips Curve
The idea that there is usually a trade-off between inflation and unemployment — lower unemployment often means higher inflation.
The Phillips Curve is still taught but economists now know it’s not stable in the long run. Expectations of inflation matter a lot. If people expect high inflation they demand higher wages, which creates more inflation.
It's the seesaw between jobs and prices — when one side goes down, the other side usually goes up.
Real world: In the 1960s many governments used the Phillips Curve to try to keep unemployment low by accepting a bit more inflation. In the 1970s it broke down and both went high at the same time (stagflation).
💡 The Phillips Curve explains why central banks often have to choose between fighting unemployment or fighting inflation.