What is Phillips curve?
[[File:Early phillips curve.jpg|thumb|right|250px|{{Center|A Phillips curve}}]] The '''Phillips Curve''' shows the [[relationship]] between [[unemployment]] and [[wikt:wage|wage]] [[inflation]] in an [[economy]]. It shows that as unemployment goes down, wages go up. It was discovered by [[British]] [[economist]] [[William Phillips (economist)|William Phillips]].<ref name=EOL>{{cite web |url=http://www.economicsonline.co.uk/Global_economics/Phillips_curve.html |title=The Phillips curve |publisher=Economics Online Ltd |access-date=12 December 2015}}</ref> He studied wage inflation and unemployment in the [[United Kingdom]] from 1861 to 1957.<ref>{{cite web |url=http://www.econlib.org/library/Enc/PhillipsCurve.html |title=Phillips Curve |author=Kevin D. Hoover |publisher=Library of Economics and Liberty |access-date=12 December 2015}}</ref> The theory states that [[Economics|economic]] growth causes inflation. This causes more [[job]]s to become available which lowers unemployment.<ref name=Invest>{{cite web |url=http://www.investopedia.com/terms/p/phillipscurve.asp |title=Phillips Curve |publisher=Investopedia |access-date=12 December 2015}}</ref> In the 1970s high levels of inflation and unemployment were occurring at the same time. This disproved the theory, at least in the [[Long run and short run|long run]].<ref name=Invest/> Many economists feel that the Phillips curve still has value in the [[Long run and short run|short run]] where there is still a tradeoff between inflation and unemployment.<ref>{{cite web |url=http://www.economicshelp.org/blog/1364/economics/phillips-curve-explained/ |title=Phillips Curve |publisher=EconomicsHelp.org |access-date=12 December 2015}}</ref> == Related pages == * [[Microeconomics]] * [[Economy]] * [[Monetary policy]] == References == {{reflist}} {{commons}} {{employment}} {{stub}} [[Category:Economic theories]]