Phillips Curve Isn’t Broken, Insists Michael Ashton

The video discusses the Phillips Curve, a concept linking unemployment and wage changes, and its relevance to inflation. It explains that the Phillips Curve originally focused on wage rates in the UK, not overall inflation. The video highlights that low unemployment leads to higher wage changes, similar to supply-demand dynamics. The Atlanta Fed Wage Tracker is used to analyze wage trends, showing that wages rise as unemployment falls, although with a lag. The discussion emphasizes the importance of understanding these economic relationships.

What is the primary focus of the original Phillips Curve?

• Economic growth and productivity

• Overall inflation rates

• Unemployment and wage changes

• Interest rates and inflation

How does low unemployment affect wages according to the discussion?

• It stabilizes wage growth

• It leads to larger wage changes

• It has no effect on wages

• It decreases wage changes

What analogy is used to explain the relationship between unemployment and wage changes?

• Supply and demand

• Cause and effect

• Action and reaction

• Push and pull

What does the Atlanta Fed Wage Tracker specifically monitor?

• Wage changes among continuously employed individuals

• Unemployment rates in various regions

• Average hourly earnings of all workers

• Inflation rates across different sectors

What is a key characteristic of wage increases as discussed in the final section?

• They are unpredictable

• They are consistent across all sectors

• They are immediate and rapid

• They are lagged