Phillips curve framework

E48746

The Phillips curve framework is a macroeconomic concept that posits an inverse relationship between inflation and unemployment, shaping policymakers’ understanding of inflation dynamics and trade-offs in the postwar era.

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All labels observed (5)

Statements (49)

Predicate Object
instanceOf concept in macroeconomics
economic theory
macroeconomic framework
appliesTo short-run inflation-unemployment trade-off
associatedWith A. W. Phillips
assumes imperfect adjustment of expectations
short-run nominal rigidities
basedOn empirical relationship between inflation and unemployment
contrastsWith classical view of money neutrality in the long run
coreIdea higher unemployment is associated with lower inflation in the short run
lower unemployment is associated with higher inflation in the short run
criticizedFor breakdown during stagflation in the 1970s
instability of the inflation-unemployment relationship over time
policy ineffectiveness under rational expectations
distinguishedFrom long-run Phillips curve with no trade-off
extendedBy New Keynesian economics
surface form: New Keynesian Phillips curve

forward-looking inflation expectations
models with nominal rigidities
field macroeconomics
formalizedAs expectations-augmented Phillips curve by Edmund Phelps
Phillips curve framework self-linksurface differs
surface form: expectations-augmented Phillips curve by Milton Friedman
hasVariant New Keynesian economics
surface form: New Keynesian Phillips curve

Phillips curve framework self-linksurface differs
surface form: accelerationist Phillips curve

expectations-augmented Phillips curve
implies no long-run trade-off between inflation and unemployment under adaptive or rational expectations
incorporates expectations-augmented Phillips curve
output gap
role of inflation expectations
supply shocks
influenced design of inflation targeting regimes
output gap-based policy rules
influencedPolicyIn 1960s
1970s
postwar era
originatesFrom A. W. Phillips 1958 paper on wage inflation and unemployment in the United Kingdom
positsRelationshipBetween inflation
unemployment
relatedTo NAIRU concept
natural rate of unemployment
non-accelerating inflation rate of unemployment
relationshipType inverse relationship between inflation and unemployment
usedBy central banks
fiscal authorities
macroeconomists
usedIn macroeconomic policy analysis
usedToAnalyze costs of disinflation
inflation dynamics
monetary policy trade-offs
output-inflation trade-offs

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Input
Subject: Phillips curve framework
Description of subject: The Phillips curve framework is a macroeconomic concept that posits an inverse relationship between inflation and unemployment, shaping policymakers’ understanding of inflation dynamics and trade-offs in the postwar era.

Referenced by (9)

Full triples — surface form annotated when it differs from this entity's canonical label.

Great Inflation influencedBy Phillips curve framework
New Keynesian economics usesTool Phillips curve framework
this entity surface form: Phillips curve
Phillips curve framework formalizedAs Phillips curve framework self-linksurface differs
this entity surface form: expectations-augmented Phillips curve by Milton Friedman
Phillips curve framework hasVariant Phillips curve framework self-linksurface differs
this entity surface form: accelerationist Phillips curve
New Neoclassical Synthesis isAssociatedWith Phillips curve framework
this entity surface form: New Keynesian Phillips curve
neoclassical synthesis usesConcept Phillips curve framework
this entity surface form: Phillips curve
A. W. Phillips knownFor Phillips curve framework
this entity surface form: Phillips curve
Federal Reserve monetary policy framework includesConcept Phillips curve framework
this entity surface form: Phillips curve
The New Keynesian Phillips Curve: Time Series Evidence from the Euro Area relatedTo Phillips curve framework
this entity surface form: Phillips curve