A Structuralist Model of the Wage-Price Spiral with Non-Linear Demand Pressure Terms
نویسندگان
چکیده
We introduce the results of a non-parametric estimate of the wage-Phillips Curve into a simplified version of the model by Flaschel and Krolzig (2006). The resulting non-linearity in the wage inflation-employment relation translates into a non-linearity in the reduced form of the model, namely the wage-price spiral. A dynamical analysis is then provided, both in wage-led and profit-led effective demand regimes. In a profitled economy, shown to be the empirically relevant case in the case of the US economy, there are 2 stable equilibria of Goodwin (1967) growth cycle type, identified as a stable depression and a stable boom. Both steady states are surrounded by trajectories that cycle around their basins of attraction if the economy remains viable in the economic part of the phase space. The obtained type of growth fluctuations can be verified by a long phase cycle estimation for the US economy using a method developed by Kauermann, Teuber and Flaschel (2007). ———————
منابع مشابه
Modeling Inflation in India – An Error Correction Approach
The Structuralist Approach: According to this view, inflation is seen to arise out of structural impediments to the expansion of production in certain crucial sectors of a developing economy. An increase in investment is expected to lead to an increase in demand of consumer goods. This increase in demand for consumer goods leads to an increase in prices, given inelastic supply. Prices rise to a...
متن کاملTwo-echelon Supply Chain Considering Multiple Retailers with Price and Promotional Effort Sensitive Non-linear Demand
This study deals with the effects of a supply chain (SC) with single product, multiple retailers and a manufacturer, where the manufacturer(he) produces lotsize of the product that contains a random portion of imperfect quality item. The imperfect quality products are sold in a secondary shop. The new contribution of this paper is a new non-linear demand function. Demand of the end customers va...
متن کاملTesting Wage and Price Phillips Curves for the United States
This paper demonstrates, contrary to what has been shown recently, that demand pressure, besides cost-pressure, matters both in the labor market and the market for goods in the determination of wage and price inflation. We consider and estimate both wage and price Phillips-curves for the U.S., using OLS and nonparametric estimation techniques. The finding is that on the whole wages are more fle...
متن کاملOptimal emergency demand response program integrated with multi-objective dynamic economic emission dispatch problem
Nowadays, demand response programs (DRPs) play an important role in price reduction and reliability improvement. In this paper, an optimal integrated model for the emergency demand response program (EDRP) and dynamic economic emission dispatch (DEED) problem has been developed. Customer’s behavior is modeled based on the price elasticity matrix (PEM) by which the level of DRP is determined for ...
متن کاملTesting the Dynamics of Wages and Prices for the US Economy
This paper demonstrates, contrary to what has been shown recently, that demand pressure, besides differentiated cost-pressure, matters both in the labor market and the market for goods in the determination of wage and price inflation. We consider from the theoretical perspective and estimate for the USA, using OLS and more advanced methods, both separately and simultaneously wage and price Phil...
متن کامل