What does the Phillips curve predict?

The Phillips curve remains the primary framework for understanding and forecasting inflation used in central banks. Many economists believe that the Phillips curve is a very useful relationship because both inflation and unemployment are key measures of economic performance.You can read about the Inflation in Economy- Types of Inflation, Inflation Remedies [UPSC Notes] in the given link.

The Phillips curve suggests policymakers have a choice between prioritising unemployment or inflation. 

Further readings:

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

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