The Variation Of The Phillips Curve, The Conditions Of Globalization

The Phillips Curve model reflects the trade-off relationship between inflation and unemployment. This model is regarded as one of important macroeconomics theories and reformulated all the long, whether for the theory of inflation or unemployment, whether for matheconomics research or policy research, whether for static analysis or dynamic analysis. Edmend S. Phelps, the most eminent of New Keynesian economists who developed Phillips Curve for better vitality, was awarded the 2006 Nobel Memorial Prize in Economic Science. Phelps thought that there only occurres short-run Phillips Curve because people?ˉs forecasts or expections would cause this curve in less stabilization. He then formulated the Expectations-augmented Phillips Curve model. However, economy globalization is greatly affecting the ways in which inflation and unemployment operate and these variables become characterized of internationalization. So the Phillips Curve model for a closed economy must be adjusted and restablished in the globalizing economy.The paper attempts to extent and adapt the New Keynesian Phillips Curve(NKPC) model to open condition and establish the Globalizingly Revised NKPC model to meet econometrics and practice tests. The paper consists of four parts. The first part introduces some neccesary preconditions and hypotheses. The second part developes NKPC to globlization context by analyzing how international trades and finances influence the inflation rate and the unemployment rate. The third part applies regression analysis econometric methods to test the derived specification by the time-series data from America, Span and Sweden and gives their comparison. The last part expounds the conclusion and policy suggestions.The paper comes to the conclusion that inflation rate is positively correlated by import price in the globalization context. That is to say, the lower import price gets, the lower inflation rate gets. It is clear that developing coutries receive more inflation pressure than developed coutries so that higher inflation pressure would release in the whole world market. As the most large and rapid developing country, China significantly benefits the mitigating of the world inflation, especially developed countries?ˉinflation. China economy rapid growth do help keep the world economy prosperous and stabilizing.