The original Phillips curve

Before Phelps's work, the prevailing view was that economic policy makers faced a tradeoff between unemployment and inflation: Policies that reduced unemployment would increase inflation, and policies that reduced inflation would increase unemployment.

This relationship between inflation and unemployment seemed to be supported by the data. For example, the following table shows the unemployment rate and inflation rate for the United States from $1961$ to $1969.$ The inflation rate is measured by the percentage change in the GDP deflator.

$\backslash$table$[[$Year$,\backslash$table$[[$Inflation Rate$],[($Percent$)]],\backslash$table$[[$Unemployment Rate$],[($Percent$)]]],[1961,1\mathrm{.}1,6\mathrm{.}7],[1962,1\mathrm{.}4,5\mathrm{.}5],[1963,1\mathrm{.}3,5\mathrm{.}7],[1964,1\mathrm{.}5,5\mathrm{.}2],[1965,1\mathrm{.}4,4\mathrm{.}5],[1966,2\mathrm{.}4,3\mathrm{.}8],[1967,3\mathrm{.}5,3\mathrm{.}8],[1968,4\mathrm{.}6,3\mathrm{.}6],[1969,5\mathrm{.}8,3\mathrm{.}5]]$