Revisiting the Phillips Curve

The Phillips Curve<?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" /> The Alia economics blog has a good feature on the Phillips Curve for the <?xml:namespace prefix = st1 ns = "urn:schemas-microsoft-com:office:smarttags" />United States and its relevance to the Federal Reserve when setting short term interest rates.

‘The Phillips Curve is a concept often covered in introductory macroeconomics. However, in some economic and political circles, the concept is considered outdated and useless. Some economists and commentators, such as Lawrence Kudlow, might go as far as to say that the Phillips Curve is dead. Why does the Phillips Curve command such controversy? Is it as irrelevant as some economists claim?’

Worth a read through: http://econblog.aplia.com/2007/11/phillips-curve-and-federal-reserve.html

Here is the unemployment and inflation data for the UK – not presented as in the usual Phillips Curve style. But can you identify any noticeable relationships between the two macroeconomic variables?