In his latest column "Wonking Out: Taking the 'Flation' Out of Stagflation", Paul Krugman postulates that the "Phillips Curve"—the relationship between the level of employment and the rate of inflation, which is a central concept in all macroeconomic models—may not be a straight line, as most models assume it to be, but be steep near full employment and relatively flat at higher levels of unemployment:
Paul Krugman reinvents the wheel
Paul Krugman reinvents the wheel
Paul Krugman reinvents the wheel
In his latest column "Wonking Out: Taking the 'Flation' Out of Stagflation", Paul Krugman postulates that the "Phillips Curve"—the relationship between the level of employment and the rate of inflation, which is a central concept in all macroeconomic models—may not be a straight line, as most models assume it to be, but be steep near full employment and relatively flat at higher levels of unemployment: