BIS central bankers’ speeches  3  The Phillips curve Let me summarize this price rise mechanism in terms of the Phillips curve, which illustrates the relationship between the output gap and inflation. This relationship is shown in Chart 8, with the red dots representing the four positions observed over the past year.
While it is difficult to gauge the shape and position of the Phillips curve on a real-time basis, we find that the red dots lie above the Phillips curve based on observations for the past 18 years.