In the 1960s and early 70s, economists believed that the short-run Phillips curve indicated that policymakers could choose the mix of inflation and unemployment they were willing to accept and achieved this with appropriate fiscal and monetary policies.

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This was the dominant economic theory at the time, known as the "Phillips Curve tradeoff." It was largely discredited in the 1970s when stagflation (high inflation and high unemployment) occurred, challenging the idea of a stable short-run tradeoff between inflation and unemployment.

In the 1960s and Early 70s, Economists Believed That the Short-Run