Monetary and fiscal authorities are currently confronted with the task of simultaneously slowing price increases and maintaining employment growth. Policies directed toward the achievement of both objectives are affected by the policymakers’ understanding of the underlying factors influencing prices and employment (or unemployment). Two principal views on this issue have emerged in the past decade. One stresses the shorter “trade-off” between prices and unemployment, and the other emphasizes the absence of a stable long-term relationship between varying rates of anticipated price changes and the level of unemployment.