Wage Exploitation as Disequilibrium Price

Keynesian Dynamics and the Wage-Price Spiral. A Baseline Disequilibrium Approach

We reformulate and extend the standard AS-AD growth model of the Neoclassical Synthesis (Stage I) with its traditional microfoundations. The model still has an LM curve in the place of a Taylor interest rate rule, exhibits sticky wages as well as sticky prices, myopic perfect foresight of current inflation rates and adaptively formed medium run expectations concerning the investment and inflati...

Wage Setting and Price Stability

In the Governing Council’s view, the outlook for price developments remains subject to upside risks ... It is therefore crucial that social partners continue to meet their responsibilities. In this context, wage agreements should take into account productivity developments, while recognising the still high level of unemployment and price competitiveness positions. As stated on previous occasion...

Wage and Price Phillips Curves An empirical analysis of destabilizing wage-price spirals

In this paper we introduce a small Keynesian model of economic growth which is centered around two advanced types of Phillips curves, one for money wages and one for prices, both being augmented by perfect myopic foresight and supplemented by a measure of the medium-term inflationary climate updated in an adaptive fashion. The model contains two potentially destabilizing feedback chains, the so...

Does Wage Inflation Cause Price Inflation?

Business Cycles , Wage Stickiness and Labor Market Disequilibrium

Real Business Cycles are often studied in the context of the general equlibrium framework with competitive markets, flexible wages and prices. This restricts the effective application of intertemporal models to the real world business cycles. Stickiness of wages and prices have been considered in recent monopolistic competition models. In this paper, we go a step further and separate labor supp...