1. Phillips Curve

2. The Phillips Curve
The short run Phillips Curve shows the relationship between inflation and unemployment.
Developed by New Zealand economist A. H. W. Phillips

3. Unemployment and Inflation: The Phillips Curve

4. Aggregate Supply and the Phillips Curve
Both SRAS and PC show the relationship between the change in unemployment and inflation
The PC shows the relationship between the level of unemployment and the inflation rate.

5. Phillips Curve and Inflation
Inflation can shift the Phillips curve. How?
The inflation that can shift the PC is the expected rate of inflation.
Based on the theories of Milton Friedman and Edmund Phelps that expectations about future inflation affects current inflation

6. Expected Inflation and the Short-Run Phillips Curve

7. Long Run Phillips Curve
The LRPC is actually derived from, and related to, the nonaccelerating inflation rate of unemployment (NAIRU)
NAIRU is the unemployment rate at which inflation does not change over time (it matches expectations, in other words.)
LRPC is the line where, if unemployment drops, inflation accelerates, and vice versa.

8. The NAIRU and the Long-Run Phillips Curve