Phillips curve

Definition

Graphic description of the inverse relationship between wages and unemployment levels (higher the rate of change of wages lower the unemployment, and vice versa). Although its main implication is that a government has to strike a balance between the two levels, the relationship between the levels (in general) is not stable enough to reach an exact judgment. Also called tradeoff curve, it was invented in 1958 by the UK engineer and economist Albert William Housego Phillips (1914-75).