Wage Curve vs. Phillips Curve : are there macroeconomic implications?

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Title: Wage Curve vs. Phillips Curve : are there macroeconomic implications?
Authors: Whelan, Karl
Permanent link: http://hdl.handle.net/10197/246
Date: 14-Oct-1997
Abstract: The standard derivation of the accelerationist Phillips curve relates expected real wage inflation to the unemployment rate and invokes a constant price markup and adaptive expectations to generate the accelerationist price inflation formula. Blanchflower and Oswald (1994) argue that microeconomic evidence of a low autoregression coefficient in real wage regressions invalidates the macroeconomic Phillips curve. This conclusion has been disputed by a number of authors on the grounds that the true autoregression coefficient is close to one. This paper shows that given the assumption of a constant price markup, micro-level real wage dynamics have no observable implications for macro data on wage and price inflation.
Type of material: Working Paper
Publisher: Federal Reserve
Subject LCSH: Phillips curve
Autoregression (Statistics)
Inflation (Finance)--Mathematical models
DOI: 10.2139/ssrn.44610
Language: en
Status of Item: Not peer reviewed
Appears in Collections:Economics Research Collection

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