The Phillips Curve and Inflation Theory Reconsidered

Masayuki Otaki

Chapter 4 in Keynesian Economics and Price Theory, 2015, pp 53-62 from Springer

Abstract: Abstract This chapter extends the fundamental theory described in Chap. 2 by permitting that labor productivity varies in conjunction with the unemployment rate. It is assumed that a higher unemployment rate aggravates future labor productivity because unemployment curtails households’ income for educating their children. Stagnation in labor productivity triggers disinflation disinflation . This is because the unit cost of production becomes expensive relative to an arbitrarily given future price. Thus, there emerges a negative causality between the unemployment rate and the inflation rate even though ad-hoc assumptions concerning price stickiness are excluded.

Keywords: Downward Phillips curve; Price stickiness; Labor productivity progress; Inflation as a real phenomenon (search for similar items in EconPapers)
Date: 2015
References: Add references at CitEc
Citations:

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:advchp:978-4-431-55345-8_4

Ordering information: This item can be ordered from
http://www.springer.com/9784431553458

DOI: 10.1007/978-4-431-55345-8_4

Access Statistics for this chapter

More chapters in Advances in Japanese Business and Economics from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().