Traditionally, at least in the context of textbooks, the relationship between inflation and the unemployment rate has simply been an inverse one. As the unemployment rate decreases, talent becomes scarce, inflation emerges as wages face upward pressure. This hasn’t held true recently, and the WSJ recently published a good article explain further. Here’s a link to the article, along with an excerpt from the article describing alterations to the Philips Curve:



Philips Curve and Deviations