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The Wage Curve and the Phillips Curve

John Roberts

No 1997-57, Finance and Economics Discussion Series from Board of Governors of the Federal Reserve System (U.S.)

Abstract: Blanchflower and Oswald (1994) have argued that, in regional data, the level of unemployment is related to the level of wages. This result is at variance with the implications of the original Phillips curve for regional data, which would predict that the change in wages ought to be related to the unemployment rate. On the other hand, there is considerable empirical support for the expectations-augmented Phillips curve using macroeconomic data. I resolve this tension by showing that a standard macroeconomic expectations-augmented Phillips curve can be derived from microfoundations that begin with the wage curve.

Keywords: Phillips curve; wage curve; new keynesian economics (search for similar items in EconPapers)
Pages: 15 pages
Date: 2019-12-04
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