The Phillips curve as a more general model than the Wage Setting curve

Frédéric Reynès ()

No 2010-28, Documents de Travail de l'OFCE from Observatoire Francais des Conjonctures Economiques (OFCE)

Abstract: This article studies the theoretical foundations of the two main structural wage equations proposed in the literature, namely the Phillips curve and the WS curve. It reinstates to a certain extent the wage Phillips curve by showing that the Phillips curve is preferable to the WS curve from a theoretical point of view. This contradicts the results of previous researches that conclude to the lack of theoretical foundation of the Phillips curve. Moreover, this article shows that the WS curve can be interpreted as a particular case of the Phillips curve: the case of full hysteresis.

Keywords: Phillips curve; WS curve; equilibrium unemployment (search for similar items in EconPapers)
JEL-codes: E24 (search for similar items in EconPapers)
Date: 2010-10
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Persistent link: https://EconPapers.repec.org/RePEc:fce:doctra:1028

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