Eurozone Unemployment Hits Record High as Inflation Rises Unexpectedly Eurozone unemployment rose to 10.7 percent. At the same time, Eurozone inflation unexpectedly rose to 2.7 percent a year, up from the previous month’s 2.6 percent a year.
a. How does the Phillips curve model account for a very high unemployment rate?
b. Explain the change in unemployment and inflation in the Eurozone in terms of what is happening to the short-run and long-run Phillips curves.