Graphic representation of the inverse relationship between the rate of unemployment and the rate of change in money wages.
In 1958 A. W. Phillips plotted British unemployment rates and rates of change in money wages and found that when unemployment rates were low, employers were more likely to bid wages up to lure good employees away from their competitors. He claimed that this was a stable relationship. In the 1960s macroeconomists substituted the rate of price inflation for the rate of change in money wages and promulgated the curve as a tool of economic policy, arguing that the simultaneous achievement of low unemployment and low inflation was problematic. Monetarists, including Milton Friedman , claimed the relationship was not stable.