Tag Archives: theory

Sharing resources and utility curves

A fundamental concept in economics is that of trade.  Two parties will want to share their possessions in a way that benefits them both.  The Edgeworth Box is a graphical representation of this trading; before looking at the overall box, however, it’s important to understand an individual’s utility curves. Continue reading

The continuing relevance of the Phillips curve

The Phillips curve is an indication of the relationship between unemployment and inflation. The curve is named after AWH Phillips, who discovered the existence of this relationship when looking at UK data between the years 1861 and 1957. The curve shows that as unemployment rises, the rate of inflation can be observed to be lower, and vice versa. The relationship was similar for other developed countries.  Continue reading