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| Author: | Blanchard, O. Katz, L. |
| Title: | Wage dynamics: reconciling theory and evidence |
| Journal: | American Economic Review
1999 : MAY, VOL. 89:2, p. 69-74 |
| Index terms: | ECONOMICS PAY THEORIES |
| Language: | eng |
| Abstract: | U.S. macroeconomic evidence shows a negative relation between the rate of change of wages and the unemployment rate, conditional on lagged price inflation. This (wage) Phillips-curve relationship can be interpreted as a negative relation between the expected rate of change of the real wage and unemployment. In contrast, most theories of the natural rate of unemployment imply a "wage curve", that is, a negative relation between the level of the real wage and unemployment, given the reservation wage and the level of productivity. |
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