The L-shaped aggregate supply curve and the future of macroeconomics

James Forder

No 486, Economics Series Working Papers from University of Oxford, Department of Economics

Abstract: The idea of the 'L-shaped aggregate supply curve', supposedly a feature of primitive macroeconomic models, is in fact a reasonable reconstruction of a well developed way of thinking that specifically denied a relation between wage change and aggregate employment. Neither that approach nor the idea of cost-push inflation to which it is related need be crude or superficial. Although the ideas in question were swept away by the Phillips curve, they have much merit and their reintroduction to mainstream macroeconomics might pay large dividends.

Keywords: Phillips curve; Wage determination; Keynesianism (search for similar items in EconPapers)
JEL-codes: B22 E24 (search for similar items in EconPapers)
Date: 2010-05-01
New Economics Papers: this item is included in nep-cba, nep-ene and nep-env
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Citations: View citations in EconPapers (1)

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