An Introduction to the Phillips Curve: Covering the Basics (Part 1)

The Short Run Phillips Curve is a model representing what happens when total spending (i.e., aggregate demand) changes in an economy. It shows that changes in total spending move the inflation rate and unemployment rate in opposite directions.
The LR Phillips Curve: Originally there was only a single Phillips Curve - the one economists now refer to as the Short-run Phillips Curve. However, this original Phillips Curve gave the impression that we could maintain an unemployment rate below the Natural Rate of Unemployment without putting upward pressure on wages and driving up the price level (i.e., causing inflation). Needless to say, this is not the case, unemployment rates below the Natural Rate of Unemployment eventually do push wages higher resulting in firms laying off workers and returning the economy to the NRU.
This video is made for 1st year college students or AP/IB Economics students. It focuses on foundational economic concepts.