Working Paper


Karl Whelan



unemployment rate e31 phillips curve implications wage inflation macroeconomic inflation finance mathematical models autoregression statistics

Wage Curve vs. Phillips Curve : are there macroeconomic implications? (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.
Collections Ireland -> University College Dublin -> School of Economics
Ireland -> University College Dublin -> College of Social Sciences and Law
Ireland -> University College Dublin -> Economics Research Collection

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Karl Whelan

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Karl Whelan
University College Dublin
Total Publications: 69