trade-off

The Phillips Curve – Yes, there is a trade-off

The Phillips curve is unstable and, therefore, an imperfect guide for policy. But unstable does not mean nonexistent, and imperfect does not mean useless. As long as the tools of monetary policy influence both inflation and unemployment, monetary policymakers must be cognizant of the trade-off. Mr. Powell was smart to acknowledge during his congressional hearing … Continue reading →