The shape of the long-run Phillips curve suggests that over a long time horizon there is a magnified tradeoff between the unemployment rate and inflation.

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The shape of the long-run Phillips curve suggests that there is no tradeoff between the unemployment rate and inflation over a long time horizon. This means that attempting to lower unemployment rates can only be achieved through temporary increases in inflation, as the two are not permanently correlated. Therefore, the long-run Phillips curve is vertical or nearly vertical, indicating that no matter how low the unemployment rate is, it cannot be maintained if inflation is too high.

The Shape of the Long-Run Phillips Curve Suggests That Over