The Phillips curve is used by Central banks to forecast the inflation when the rate of unemployment falls. The Phillips curve was a concept used to guide macroeconomic policy in the 20th century. 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:
- Inflation Targeting: Methods, Drawbacks and Benefits
- Indian Economy Notes For UPSC Exam [Download PDFs]
Comments