How Central Banks Use the Phillips Curve

Monetary Policy Explained with Fexingo: Central Banks, Money Supply, and Interest Rates · Jul 15, 2026 · 8m · transcript

In this episode, Lucas and Luna explore how central banks use the Phillips curve to gauge the trade-off between inflation and unemployment. They break down why the curve has flattened over the past two decades, using the U.S. experience from the 1970s to today as a case study. The conversation digs into the breakdown of the traditional relationship after the 2008 financial crisis, the role of anchored inflation expectations, and how the Federal Reserve still relies on a modified version of the curve for policy decisions. Lucas explains the concept of the 'non-accelerating inflation rate…