However, modified forms of the Phillips curve that take inflationary expectations into account remain influential. The theory has several names, with some variation in its details, but all modern versions distinguish between short-run and long-run effects on unemployment. Modern Phillips curve models include both a short-run Phillips Curve and a long-run Phillips Curve. This is because in the short run, there is generally an inverse relationship between inflation and the unemployment rate; as illustrated in the downward sloping short-run Phillips curve. In the long run, that relationship breaks down and the economy eventually returns to the natural rate of unemployment regardless of the inflation rate.
howevEr, mODified foRms of The PhillipS Curve That TaKE iNflationaRY expeCTAtiOns INTo accOUNT reMaIN Influential. The ThEoRY has SeveRAL nAMEs, wIth Some variation iN itS Details, bUt ALL modern vErsions distinguisH bEtween sHorT-Run And loNg-ruN effECts on uneMPLoymEnt. mOdErn phillips cuRVE mOdelS incluDe both a sHorT-RUn phILLIpS cuRve aNd A lONg-Run PhillIpS cuRve. thIS is becauSe in the sHort rUn, tHErE is geNeRaLLy aN inverse relAtiOnSHip betWeen InFlaTiOn aNd tHe unemPloYmeNT rate; as illustraTed in tHe dOwnwarD slopiNG sHort-Run phIlliPs curvE. in The Long run, that relatIonSHIp breaks dOwN AnD thE EConomy eventuALly RetURNS To The natURal rate of unempLoYmeNT reGArdless of the INFlatiON rATe.