Phillips Curve Calculator

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Calculates the expected inflation rate based on the unemployment rate, using a simplified Phillips Curve model.

How To Use

How to use this calculator

Start with your values, or try a preset.

Step 1

Enter Natural Rate of Unemployment (%), Actual Rate of Unemployment (%), Expected Inflation Rate (%), and Inflation Sensitivity (Coefficient) in the units shown.

Step 2

Read Inflation Rate (%) in the results panel. Results update as you change the inputs.

Step 3

Choose a preset to load an example, then adjust the values for your situation.

Worked Examples

Example calculations

See the inputs and their calculated results.

Low Unemployment, Rising Inflation

Natural Rate of Unemployment (%): 5 %; Actual Rate of Unemployment (%): 4 %; Expected Inflation Rate (%): 2 %; Inflation Sensitivity (Coefficient): 0.5

Inflation Rate (%): 2.5 %

High Unemployment, Falling Inflation

Natural Rate of Unemployment (%): 5 %; Actual Rate of Unemployment (%): 6 %; Expected Inflation Rate (%): 2 %; Inflation Sensitivity (Coefficient): 0.5

Inflation Rate (%): 1.5 %

Stable Unemployment, Stable Inflation

Natural Rate of Unemployment (%): 5 %; Actual Rate of Unemployment (%): 5 %; Expected Inflation Rate (%): 2 %; Inflation Sensitivity (Coefficient): 0.5

Inflation Rate (%): 2 %

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Important

Treat this output as a planning estimate and confirm rates, tax rules, and contract terms before making financial decisions.