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Investment Term for the Day - Phillips Curve
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The Phillips curve is an economic theory that inflation and unemployment have a stable and inverse relationship. Developed by William Phillips, it claims that with economic growth comes inflation, which in turn should lead to more jobs and less unemployment.
The original concept of the Phillips curve has been somewhat disproven due to the occurrence of stagflation in the 1970s, when there were high levels of both inflation and unemployment
The concept behind the Phillips curve states the change in unemployment within an economy has a predictable effect on price inflation.
The inverse relationship between unemployment and inflation is depicted as a downward-sloping, concave curve, with inflation on the Y-axis and unemployment on the X-axis. Increasing inflation decreases unemployment, and vice versa.
Become a supporter of this podcast: https://www.spreaker.com/podcast/investment-terms--4432332/support.
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The original concept of the Phillips curve has been somewhat disproven due to the occurrence of stagflation in the 1970s, when there were high levels of both inflation and unemployment
The concept behind the Phillips curve states the change in unemployment within an economy has a predictable effect on price inflation.
The inverse relationship between unemployment and inflation is depicted as a downward-sloping, concave curve, with inflation on the Y-axis and unemployment on the X-axis. Increasing inflation decreases unemployment, and vice versa.
Become a supporter of this podcast: https://www.spreaker.com/podcast/investment-terms--4432332/support.
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