Our global economy created jobs.Yet prices fall,but Philips Curve says the more employment the more inflation?

As a result of our "Global Economy," world employment has increased dramatically. Hundreds of thousands of additional people are producing and earning money, yet markets are very competitive and prices seem to be coming down. IE. Computers, cell phones, labor costs Etc. This reverses the principles supporting the Philips Curve. Why? Another question I dont get...?

Answer:
phillips curve says decrease in unemployment, lead to an increase inflation, lets see why? if unemployment rate decreases, it will give rise to an increase in wages(wage setting relation more unemployment, less wage) , as wages increases, cost of production will increase, the increase in costs will give rise to an increase in prices.. as prices get high inflation will increase this is true for the short run, but when we come to medium run, as priceases increase, demand for goods will decrease, and there wont be a need for more employed people, so unemployment will increase..

Well said princess

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Our global economy created jobs.Yet prices fall,but Philips Curve says the more employment the more inflation?

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