Macroeconomics › Section L · The Keynesian perspective › Topic L.3
The Phillips curve
For a while in the 1960s, economists thought governments could pick their preferred mix of unemployment and inflation from a simple curve. The Phillips curve explains why that seemed possible, and the 1970s showed why the menu kept changing.
In this topic
- A curved supply curve
- Phillips's discovery
- Reading a Phillips curve
- Worked example: reading the menu
- The 1960s policy menu
- Stagflation breaks the menu
- Why the curve shifts
- Worked example: spotting a shift
- Keynesian policy along the curve
- Is the curve still useful?
- Common mistakes to avoid
- Key takeaways
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