Based on the long-run Phillips Curve, any rate of inﬂation is compatible in the long run with the
natural rate of unemployment.

Question

Quizplus · Accepted Answer

The long-run Phillips Curve implies that there is no trade-off between inflation and unemployment in the long run, and that any rate of inflation is compatible with the natural rate of unemployment. This means that in the long run, increasing inflation will have no effect on reducing unemployment.

Based on the Long-Run Phillips Curve, Any Rate of Inﬂation