The Phillips Curve is often taught in mainstream schools of economic thought. It is essentially a positive correlation between employment and inflation, which is what far too many mainstream economists wrongly believe. Many make the even bigger mistake of thinking that there is a causal relationship between employment and inflation.
As I explain here in my earlier post on inflation, inflation is the expansion of the money supply. It is only the increase of the money supply, mostly done through Quantitative Easing(though nowadays its done in secret and undisclosed in order to avoid public scrutiny), that causes inflation. Contrary to mainstream economic belief, increasing employment DOES NOT cause inflation to spike up with it.
Peter Schiff, whose podcast channel is recommended on this blog, talks about it in his most recent episode here. Furthermore, the Phillips Curve essentially states that stagflation, in which inflation and unemployment increase simultaneously, which is also the wort-case scenario for the economy, is impossible. However, history has proved that stagflation can and does happen, which thereby disproves the Phillips Curve.
In the late 1970s, during the Carter Administration, inflation and unemployment were both increasing. Even during the lost decade(more like decades as the economic deterioration is still ongoing) since the 2007-2008 Great Recession, unemployment and inflation, again through Quantitative Easing and its secret forms, have both risen quite dramatically. By unemployment, I meant the proper way to measure it, not the bogus way they do now where those no longer looking for looking for work don’t count as unemployed, part-time workers are weighted equally to full-time workers making above six-figures etc. The mainstream measure of unemployment tends to always be skewed low for political purposes for politicians, in both parties, to wrongly claim credit for an illusorily robust economy.
It is therefore imperative, in order to provide a legitimately good-quality education on economics to students, the Phillips Curve must be rejected, rather than accepted as valid, along with fiat money and central banking, as I talk about here. This must be done for reasons much greater than the arm and leg charges to students to learn flawed economic theories such as those associated with the invalid Phillips Curve.