One of the central propositions of macroeconomic theory is the Phillips curve, a pressure cooker model of the inflationary process. If the economy runs too hot, inflation will follow. If the economy cools and the pressure drops, wage and price inflation will ease. Yet in the United States, United Kingdom, and Japan, unemployment is low but inflation is nowhere in sight. The Phillips curve has gone flat.

a. Evaluate the claim that the Phillips curve has gone flat.

b. How does the Phillips curve model account for the facts reported in the news clip?