Also the Phillips curve is a two variable snapshot from a multi variate world (iow a simplification so freshmen can understand). The right hand graph is clearly not holding the other non graphed variables constant, hence you don’t get anything useful.
Economics as taught below PhD level is about simplifying down concepts to make a complex system understandable.
Phillips curve says that as unemployment gets worse the ability of suppliers to raise prices gets weaker because consumers have less money.
Of course consumer demand is only one facet of inflation, there’s a whole system of variables there.
Seriously the second graph is garbage and it makes no sense to compare it to the claims of the Phillips curve.
Also the Phillips curve is a two variable snapshot from a multi variate world (iow a simplification so freshmen can understand). The right hand graph is clearly not holding the other non graphed variables constant, hence you don’t get anything useful.
Economics as taught below PhD level is about simplifying down concepts to make a complex system understandable.
Phillips curve says that as unemployment gets worse the ability of suppliers to raise prices gets weaker because consumers have less money.
Of course consumer demand is only one facet of inflation, there’s a whole system of variables there.
And as someone below the Phd level that was always my understanding.