Economics Phillips Curve Questions Medium
The trade-off depicted by the Phillips Curve is the inverse relationship between inflation and unemployment. It suggests that when unemployment is low, inflation tends to be high, and vice versa. This trade-off implies that policymakers face a choice between achieving low unemployment or low inflation, as it is difficult to simultaneously have both. The Phillips Curve highlights the idea that there is a short-term trade-off between these two macroeconomic variables, but in the long run, this trade-off may not hold due to various factors such as inflation expectations and supply-side shocks.