Phillips Curve Diagram. Original phillips curve diagram this analysis was later extended to look at the relationship between inflation and unemployment. Policymakers can choose to be anywhere on this curve by influencing aggregate demand through monetary and fiscal policy.
The explanation of phillips curve by the keynesian economists is quite simple and is graphically illustrated in fig. Use pdf export for high. Phillips curve classic by annika smithy.
We think of labour and product markets as being imperfectly competitive so that the equilibrium output level is where both wage and price setters make no attempt to change the prevailing real wage or relative prices.
Use createlys easy online diagram editor to edit this diagram collaborate with others and export results to multiple image formats. Using the data available from these two tables plot the phillips curve for 196069 with unemployment rate on the x axis and the inflation rate on the y axis. A lower rate of unemployment is associated with higher wage rate or inflation and vice versa. The phillips curve is a diagram that used by economists to help explain the link between inflation and unemployment.