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Definition, History and Objectives of the Phillips Curve

The Phillips curve is defined as one of the economic concepts developed by (Alban William Housego Phillips), which explains the relationship between unemployment and inflation as inverse and stable, and the theory states that economic growth is accompanied by inflation, and thus jobs increase, which reduces the unemployment rate. formulating economic policies.

The Phillips curve is based on helping to change unemployment in the economic situation through the effects that it can bring about through price inflation expectations. Inversely, an increase in inflation decreases the unemployment curve, and vice versa.

The prevailing concept in the sixties to reduce unemployment is a generalization of the belief that financial incentives can increase the overall demand for work, and thus the need for employees increases, and this reduces the unemployment rate, and raises the wage rate by companies as a kind of competition.

But the stagnation of economic inflation that occurred during the 1970s led to a little confusion in the original concept; due to high levels of inflation and unemployment.

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