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Why is the Phillips curve important?

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:

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

Related Links

RBI – Reserve Bank of India [UPSC Indian Economy Notes]

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Consumer Price Index (CPI) – Indian Economy Notes

Wholesale Price Index (WPI) – Indian Economy Notes

Economic Survey 2021 – Definition, Importance & Highlights

Fiscal Policy in India – Objectives, Components, Fiscal Consolidation, FRBM Act, 2003

Monetary Policy – Objectives, Roles and Instruments (UPSC Indian Economy)

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