on the search theorists' approach to the phillips curve
abstract: the inverse relation between (wage)inflation and the unemployment rate of traditional macroeconomic theory lacks a microeconomic foundation in a neo-classical framework. neoclassical reasoning implies that employment is always at the full employment level and independent of inflation. in p...| Link(s) zu Dokument(en): | IHS Publikation |
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| 1. Verfasser: | |
| Format: | IHS Series NonPeerReviewed |
| Sprache: | Englisch |
| Veröffentlicht: |
institut fuer hoehere studien
1985
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| Zusammenfassung: | abstract: the inverse relation between (wage)inflation and the unemployment rate of traditional macroeconomic theory lacks a microeconomic foundation in a neo-classical framework. neoclassical reasoning implies that employment is always at the full employment level and independent of inflation. in part 2 it is shown how search theory offers a derivation of the phillips relation in a neoclassical framework by removing the complete information postulate of walrasian equilibrium theory. part 3 gives an economic rationale for sticky prices in a market economy with incomplete information, whereas part 4 keynes' concept of unvoluntary unemployment is reexamined in the light of search theory. part 5 gives a critical evaluation why the search theorists' derivation of the short-run phillips relation might not be convincing on theoretical grounds.; |
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