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Low Unemployment Can Drive Inflation Says The Phillips Curve : Planet Money : The Indicator from Planet Money For decades, policymakers chose to put millions of people into either a frying pan (inflation) or a fire (unemployment). An idea called the Phillips Curve was influential. But is it still?

The Indicator from Planet Money

Inflation, Unemployment And The Phillips Curve

Inflation, Unemployment And The Phillips Curve

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Business graph unemployment and inflation in newspapers
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Getty Images
Business graph unemployment and inflation in newspapers
Getty Images

The US government has been spending money. A lot of money. And sometimes we just get this vague unease. All this stimulus is good for jobs, but there must be a catch lurking somewhere, right?

There's a concept economists use to think about this connection between the inflation and unemployment effects of government spending: The Phillips Curve. It's named after the Indiana Jones of economics, former Royal Air Force engineer Bill Phillips. To understand the current debate about whether we should worry about inflation, you kind of need to know about the Phillips Curve.

On The Indicator, we're going to introduce you to the crafty Kiwi the Phillips Curve is named after, and we're also going to check the pulse on the Phillips Curve. 60 years on: Is the Phillips Curve dead?

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