Map of europe continent for In the UNITED STATES, as well as in many other countries, this is measured by the percentage change in the Consumer Price Index or CPI. Moreover, the modern Phillips Curve is often augmented with a term that represents inflationary expectations and is, therefore, referred to as the expectations-augmented Phillips Curve. First developed by Phillips, the inflation-unemployment rate relationship was later modified by Milton FRIEDMAN and Edmund Phelps. Today, the standard expectations- augmented Phillips Curve relationship is expressed as: p = pe – k(u – u*) In this equation the inflation rate is denoted by p, the expected inflation rate is denoted by pe, the unemployment rate is denoted by u, and u* is called the natural rate of unemployment. The latter can essentially be thought of as the unemployment rate that prevails in normal times. Thus, u* is an equilibrium unemployment rate that the economy naturally gravitates toward over time. In any particular time period, however, the natural rate of unemployment may be greater than, less than, or equal to the actual unemployment rate. Map of europe continent 2016.