Definition
- Phillips curve
- The Phillips curve shows a trade-off between the unemployment rate and the inflation rate, so that when one is higher the other is lower.
- Not to be confused with: Stagflation
- Stagflation is an unhealthy combination of high unemployment and high inflation at the same time.
Test yourself
What is the difference between phillips curve and stagflation?
The Phillips curve says high inflation comes with low unemployment; stagflation is both high at once.