Principles of Macroeconomics / Unit 10 MAC 0909 short lesson, about 20 seconds
The Long-Run Phillips Curve Is Vertical
Captions available
The idea
If long-run supply is vertical at potential, unemployment sits at the natural rate whatever inflation does. So the long-run Phillips curve is vertical at the natural rate, and unit nine's tradeoff disappears.
In practice
Friedman put it in 1967 as a temporary tradeoff always, a permanent tradeoff never.
Where people slip
The short-run curve still slopes down. Both are true of different horizons.
Your place on the trail
Every lesson rests on earlier ones and opens later ones. Tap any to jump.
Something wrong in this lesson? Flag it · Sources for Principles of Macroeconomics