1. The Phillips curve: trade off or disequilibrium adjustment mechanism?

2. 16 The Phillips curve: trade off or disequilibrium adjustment mechanism?

3. Thus, the Phillips curve represents only the demand-pull component of the triangle model.

4. In the 1920s, an American economist Irving Fisher noted this kind of Phillips curve relationship.

5. The Phillips curve was regarded as an inescapable constraint on policy action which the authorities could only ignore at their peril.

6. We find that price adjustment is well described by an aggregate supply curve in price-output space, that is, a price Phillips curve.

7. We shall see that an important feature of both the monetarist approach and our simple model is the so-called augmented Phillips curve.

8. In that case A) inflation will fall from its current level which explains the upward-sloping nature of the Phillips curve B) inflation will rise from its current level which explains the upward-sloping nature of the aggregate supply curve C) unemployment will rise Above the natural rate which explains the upward