macro curve definitions

Phillips curve

shows a feasible set of output and inflation pairs for a given rate of lagged inflation.

IS curve

represents the relationship between real interest rates and total output (GDP) where the goods market is in equilibrium—specifically, where planned investment equals planned savings

Price Setting PS curve

real wage level resulting from firms' setting prices to maximize their profits.

Wage setting WS curve

represents the relationship between the aggregate employment level and the real wage required to motivate the workforce

MR curve Monetary Rule

shows the central bank’s preferred output-inflation combination for any Phillips curve it faces

ERU equilibrium rate of unemployment curve

the combinations of the real exchange rate and output at which the wage-setting real wage is equal to the price-setting real wage (ie supply side equilibrium). At any point on the ERU curve, inflation is constant.

BT balance of trade curve

showing all combinations of output and the real exchange rate where a country's trade is balanced (exports equal imports).

RX curve