Tradeoffs Between Unemployment and Inflation (the Phillips Curve)

The Phillips curve depicts an inverse relationship between inflation and the rate of unemployment. The higher rates of inflation imply lower rates of unemployment.

In short run,
Unexpected rise in inflation rate => decrease real wage of workers under long-term employment contract (Job seekers may underestimate the inflation and take job offers that they may not otherwise take or => reduce cost to employer =>stimulatese employment => reduce unemployment rate

Unexpected decline in inflation rate => increase real wage of workers => increase cost to employer => increase unemployment rate

In logn run,
Once inflation being anticipated => no long term reduction in unemployment rate