Relationship between inflation and unemployment. The meaning and modern interpretation of the Phillips curve
The article reveals the relationship between inflation and unemployment, analyzes the meaning and modern interpretation of the Phillips curve. The Phillips Curve is a curve on a graph that shows the inverse relationship between the inflation rate and the unemployment rate. Both of these concepts have not lost their relevance at the present time. In this article, the author gave a definition and a brief description of the concepts of inflation and unemployment, considered the Phillips curve in the short and long term on the example of specific countries and analyzed its efficiency. The author concluded that there is no such inverse relationship between inflation and unemployment. Confirmation of the conclusions is the analysis of inflation and unemployment in Russia and the United States, both in the long and short term. The curve constructed by the author on the basis of statistical data does not coincide with the curve proposed by Phillips, which indicates a theoretical discrepancy between this curve and reality. Thus, after a complete analysis of this topic, we can conclude that at present, due to the influence of various economic factors, the Phillips curve model does not correspond to reality. In practice, the situation is quite different, which in many respects contradicts this theory. But, despite this, his work became an important part in the study of the macroeconomic process, and it also gave impetus to the development of various schools and the theory of the relationship between inflation and unemployment.