Theory-Based Models
Theory-Based Models
Theory-Based Models
A reduced-form inflation-unemployment relationship used to study slack, inflation expectations, and supply disturbances.
Theory-Based Models
Adjust the controls, keep the diagram in view, and save or share the resulting scenario.
Scenario
This page starts from the current parameter state for the selected model.
Saved scenarios stay in this browser so you can revisit them or add them to compare.
Lower unemployment moves the economy up the curve.
Shifts the whole relationship upward.
Current point
Inflation
2.68
Unemployment
5.60
Natural unemployment
6.00
Supply shock
0.00
Impact summary
At unemployment 5.6, the curve implies inflation near 2.68.
With little cost pressure, the main movement comes from the unemployment gap itself.