This claim was later borne out by the experience of the 1970s when rising U .S . inflation did not bring about the lower unemployment rates promised by the Phillips curve . On the contrary , higher inflation coincided with higher unemployment--a combination that known as "stagflation " Though the Phelps-Friedman argument proved to be valid , there is still the possibility of a short-run trade-off between inflation and unemployment . This idea led to the intellectual development of the short-run (or expectations-augmented ) Phillips curve , which...











SUBJECTS

