At first, the inflation rate and unemployment rate changed in opposite directions, and then when the inflation rate reached a certain level, it changed in the same direction. First of all, when the inflation rate is at a low level, it shows benign inflation, which can promote investment, expand production scale and improve employment rate. This is the inverse relationship between inflation rate and unemployment rate.

When the inflation rate is further increased and hyperinflation is formed, at this time, if the investment is too large and the social resources are surplus, producers will reduce the scale of production and the employment rate will drop, and then the relationship between inflation rate and unemployment rate will change in the positive direction.

According to the theory of economic cycle, there are four stages: prosperity, recession, depression and recovery, in which the recovery stage will be accompanied by a lower inflation rate (unemployment rate will decrease), the inflation rate will continue to increase in the prosperity stage (unemployment rate will further decrease), the inflation rate will reach its peak in the recession stage (unemployment rate will begin to increase), and the inflation rate will decrease in the recession stage.