Phillips curve shift after a negative supply shock (stagflation)

An example figure from the Phillips Curve generator.

Phillips curve graph with no numbers on the axes: point A where the blue curve SRPC₁ crosses the vertical red LRPC; a second blue curve SRPC₂ above and to the right of SRPC₁, with two blue arrows from SRPC₁ to it; and a black arrow from A up and to the right to point B on SRPC₂, at higher unemployment and higher inflation. Dashed lines run from A and B to the axes, labeled π₁ and π₂ on the inflation axis and uₙ and u₁ on the unemployment axis — A negative supply shock shifts the short-run Phillips curve to the right, from SRPC₁ to SRPC₂. The economy moves from A, on the long-run Phillips curve (LRPC) at the natural rate uₙ with inflation at π₁, to B on SRPC₂, where unemployment has risen to u₁ and inflation to π₂. Both are higher at once: stagflation.

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