Phillip’s Curve

Alright kiddo, listen up. The Phillips Curve is basically a fancy way of saying that there’s a trade-off between inflation and unemployment. It’s like saying you can’t have your cake and eat it too. Imagine you’re at a party and there’s a limited amount of pizza. If everyone wants a slice, then there won’t be any left for seconds. That’s kind of like how the Phillips Curve works. When unemployment is low, inflation tends to rise because everyone’s spending money like there’s no tomorrow. But when unemployment is high, prices stay low because people ain’t got no cash to throw around. Here’s a fun fact for you: the Phillips Curve was named after an economist named A.W. Phillips who first noticed this relationship back in the 1950s. He was probably a real party animal. So next time someone starts talking about the Phillips Curve, just remember it’s all about finding that sweet spot between having a job and not paying through the nose for a slice of pizza.