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The Cost of Job Loss and the "New" Phillips Curve

Author

Listed:
  • Peter Hans Matthews

    (Economics Department, Middlebury College)

  • Ivan T. Kandilov

    (University of Michigan)

Abstract

Economists have two standard explanations for the absence of substantial nominal wage pressures in the current macroeconomic climate. The first, and more traditional, view asserts that the NAIRU has drifted downward over the last decade, while the second posits the establishment of a "new paradigm." In this paper, we describe and evaluate a third, and perhaps simpler, explanation--that a stable Phillips-consistent relationship still exists for a different measure of labor market slack, the normalized cost of job loss.

Suggested Citation

  • Peter Hans Matthews & Ivan T. Kandilov, 2002. "The Cost of Job Loss and the "New" Phillips Curve," Eastern Economic Journal, Eastern Economic Association, vol. 28(2), pages 181-202, Spring.
    • Handle: RePEc:eej:eeconj:v:28:y:2002:i:2:p:181-202
    as

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    File URL: http://web.holycross.edu/RePEc/eej/Archive/Volume28/V28N2P181_202.pdf
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    References listed on IDEAS

    as
    1. Blanchflower, David G, 1991. "Fear, Unemployment and Pay Flexibility," Economic Journal, Royal Economic Society, vol. 101(406), pages 483-496, May.
    2. George A. Akerlof & William R. Dickens & George L. Perry, 1996. "The Macroeconomics of Low Inflation," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 27(1), pages 1-76.
    3. Katharine G. Abraham & John S. Greenlees & Brent R. Moulton, 1998. "Working to Improve the Consumer Price Index," Journal of Economic Perspectives, American Economic Association, vol. 12(1), pages 27-36, Winter.
    4. Lawrence F. Katz & Olivier Blanchard, 1999. "Wage Dynamics: Reconciling Theory and Evidence," American Economic Review, American Economic Association, vol. 89(2), pages 69-74, May.
    5. Samuel Bowles & Herbert Gintis, 1993. "The Revenge of Homo Economicus: Contested Exchange and the Revival of Political Economy," Journal of Economic Perspectives, American Economic Association, vol. 7(1), pages 83-102, Winter.
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    Cited by:

    1. Peter Matthews, 2002. "Technological Unemployment: A New View," Middlebury College Working Paper Series 0212, Middlebury College, Department of Economics.

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    More about this item

    Keywords

    Macroeconomics; NAIRU; Phillips Curve; Wage;
    All these keywords.

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • E27 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Forecasting and Simulation: Models and Applications
    • E37 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Forecasting and Simulation: Models and Applications

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