The New Palgrave Dictionary of Economics

2018 Edition
| Editors: Macmillan Publishers Ltd

Phillips Curve (New Views)

  • Jonas D. M. Fisher
Reference work entry


A Phillips curve is an equation which relates the unemployment rate, or some other measure of aggregate economic activity, to a measure of the inflation rate. Since there is a significant correlation between inflation and unemployment over some horizons, understanding this correlation should yield insight into the impulses the economy faces and the mechanisms that propagate their effects. Since the 1990s, research has focused on making progress in three main areas: forecasting, microeconomic foundations and empirical tests of the microfoundations.


Business cycles Cobb–Douglas functions Expectations-augmented’ Phillips curve Inflation Inflation forecasting Labour’s share of GDP Menu costs Microfoundations Phillips curve Price indexation State-dependent models Sticky prices Technology shocks Unemployment 

JEL Classifications

D4 D10 
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Copyright information

© Macmillan Publishers Ltd. 2018

Authors and Affiliations

  • Jonas D. M. Fisher
    • 1
  1. 1.