Inflation and Unemployment Relationship Evolving, Posing Challenges for Monetary Policy.
The Phillips Curve, a relationship between inflation and unemployment, has changed over time. In the US, inflation and unemployment still have a connection, but it's not as strong as before. People's expectations about inflation are more stable now. The curve has become less steep since the 1980s. However, there is a lot of uncertainty in the relationship between inflation and unemployment. These changes make it harder for policymakers to make decisions about the economy.