tutor2u | The Broken Phillips Curve and Missing Pay Rises

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The Broken Phillips Curve and Missing Pay Rises

Graham Watson

5th November 2017

Really interesting conceptual article about the conduct of monetary policy in the UK, with Larry Elliott arguing that the setting of interest rates is predicated upon a broken economic model, which holds the Phillips Curve as a fundamental assumption of policymaking.

He argues that the reasoning behind the rate rise is that we are close to full capacity and yet there's similarly no evidence of upwards pressure on wages. It is an excellent read and I recommend that all students in the final year of their post-16 courses read it.

Graham Watson

Graham Watson has taught Economics for over twenty years. He contributes to Tutor2U, reads voraciously and is interested in all aspects of Teaching and Learning.


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