At Jackson Hole, the death of Phillips Curve may concern central bankers

Bradly Boner | Bloomberg | Getty Images

Janet Yellen speaks with Mario Draghi at the Jackson Hole economic symposium, Aug. 22, 2014.

As central bankers gather at the annual Jackson Hole symposium on Friday, analysts think the death of a major economic concept could dominate discussions.

Known as Phillips curve, an economic concept developed by New Zealand economist William Phillips, it shows that inflation and unemployment have a stable and inverse relationship.

However, in the recent months with central banks using artificial ways to pump money into the economy, this inverse relationship is seen to be dying.

A number of analysts have warned that this could be risky for the global economy and discussions around the death of the Phillips curve could dominate the Jackson Hole symposium.

“The inverse relationship between unemployment and inflation is dead. The proliferation of low-wage, irregular and insecure jobs means that wage pressures – and therefore spending power – are subdued even as unemployment falls,” Edward Smythe, an economist at Positive Money, told CNBC via email.

Smythe added that this is bad news for policymakers wishing to unwind quantitative easing, and bring interest rates back to their pre-crisis levels.