How does the Phillips curve shift?

Long-run Phillips curve shifts will occur when there is a change in the natural rate of unemployment. At the natural rate of unemployment, the long-run Phillips curve is vertical. You can read about the Inflation in Economy- Types of Inflation, Inflation Remedies [UPSC Notes] in the given link.

Shifts of the entire short-run Phillips curve correspond to shifts of the short-run aggregate supply curve. Movements along the short-run Phillips curve correspond to shifts in aggregate demand.

Further readings:

  1. Inflation Targeting: Methods, Drawbacks and Benefits
  2. Indian Economy Notes For UPSC Exam [Download PDFs]

Leave a Comment

Your Mobile number and Email id will not be published.