The curve introduced by A.W. Phillips in 1958 showing a historical inverse relationship between UK wage inflation and unemployment is the Phillips curve.
Phillips studied British data from 1861 to 1957 and reported that wage increases tended to be higher when unemployment was low. The original relationship concerned nominal wage growth, not directly the consumer-price inflation rate. Later economists adapted the idea to examine inflation and unemployment more broadly.
In the short run, the curve became associated with a possible policy trade-off: efforts to reduce unemployment might coincide with higher inflation. However, Milton Friedman and Edmund Phelps argued that expectations matter. In the long run, they maintained, anticipated inflation changes the relationship and unemployment returns toward a level determined by real economic factors.
The curve’s shape and stability remain subjects of debate. Supply shocks, changing expectations, labor-market institutions, and central-bank credibility can all affect observed inflation and unemployment. It therefore should not be treated as a fixed mechanical menu of policy choices.