Created 3/10/1998
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The U.S. Phillips Curve: Inflation and Unemployment, 1960 to the Present

J. Bradford DeLong

In the 1960s inflation and unemployment in the United States moved back and forth along a stable, favorably-located short-run Phillips curve. At the end of the 1960s, however, the Phillips curve broke down: loss of confidence in the Federal Reserve's commitment to fighting inflation and the oil shock of 1973 led to a steep increase in expected inflation.

In the late 1970s and early 1980s the U.S. economy moved back and forth along a much less favorably-located short-run Phillips curve than in the 1960s.

By 1986 most of the increase in expected inflation since the 1960s had been reversed, and the economy's levels of inflation and unemployment once again moved along a relatively favorably-located short-run Phillps curve.

Inflation 1960-Present    Unemployment 1960-Present    Phillips Curve    Growth and Fluctuations, 1980-1998    Long-Run Growth  

Professor of Economics J. Bradford DeLong, 601 Evans Hall, #3880
University of California at Berkeley
Berkeley, CA 94720-3880
(510) 643-4027 phone (510) 642-6615 fax

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