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Philips Curve, graph of Philips curve, equation of Philips.

Philips curve is named after A.W. Philips. Philips Curve describes the relationship between unemployment and inflation.
In 1958, When Philips was professor at London School Of Economics, he took time series  data on the rate of unemployment and the rate of increase in nominal wage rate of the UK for period from 1861 to 1957 and he established the following relationship,
                                                 

                                  w = a - bu 

w is the wage rate 
a, b are constant 
u is the rate of unemployment.

He found that there exist an inverse relationship between Wage(w) rate and Unemployment(u). 
The policy implication for such a result was "An Economy can't have both low inflation and low unemployment simultaneously."

Graph of the Philips curve

TT is the graph of the Philips curve on the Y axis Inflation rate and on the x axis Unemployment rate.


Philips Curve, graph of Philips curve, equation of Philips.
TT is a philips curve


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