The demand-pull story of inflation is not consistent with the original Phillips Curve.

Question

Quizplus · Accepted Answer

The original Phillips Curve was based on the idea that there was a stable trade-off between inflation and unemployment. It did not consider the role of demand in driving inflation. The demand-pull theory of inflation, which attributes inflation to excess demand in the economy, emerged later and is not consistent with the original Phillips Curve.

The Demand-Pull Story of Inflation Is Not Consistent with the Original