Why Inflation Stays Low Even Though Unemployment Is Down

January 3, 2018

To long-time baseball fans, the Phillips Curve sounds like a tribute to A.W. Phillips, a New Zealand-born economist who in 1958 noticed that wage growth is strong when the jobless rate is low. (Yes, kind of obvious to the layman.) American economist Paul Samuelson later made a bolder restatement of the Phillips Curve, saying that overall inflation—not just wage growth—is higher when labor markets are tight. Except the Phillips Curve hasn’t…

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