1. The Phillips Curve
BY J.A.SACCO

2. The Phillips Curve Named after A.W. Phillips, Br. Economist (1950’s)
Illustrates the twin objectives of price stability(inflation) and full employment is extremely difficult to achieve
Conflict results from the fact that the price level begins to rise before the economy reaches full employment

3. The Phillips Curve LRPC 1)How does the Phillips
The Phillips curve implies a
policy trade-off between
inflation and unemployment.
LRPC
1)How does the Phillips
Curve relate to the AD/AS
Model. ?
2) How does a shift of AD
and AS relate to both?
3) What are the causes of a shift of the SRPC?
Inflation Rate 6% 5%
SRPC
Unemployment Rate

4. The Phillips Curve
LRPC
Inflation Rate
SRPC
Unemployment Rate

5. The Phillips Curve LRPC 1)What does the LRPC represent?
2) How does the LRPC shift?
Inflation Rate 6%
SRPC 5%
Unemployment Rate