The recent “benign” combination of strong output growth and low inflation has led to speculation that the potential growth rate of real GDP has increased. This paper exam ines trends in labor supply to see whether this source of GDP growth might have accelerated. Discussions of labor supply often focus on labor force p a rt i c i p ation. But other considerat i o ns—s u ch as the length of the ...

Post Keynesians [hereafter PK] fashion their theory of employment (i.e., private sector labordemand hiring) utilizing Keynes's general theory. Entrepreneurial demand for hiring workers is derived from the point of effective demand determined in product markets. Since Keynes's "general" theory requires fewer restrictive axioms than the axiomatic theory underlying both classical economics (new an...

Two sources of asymmetry in the Phillips curve are considered: the “capacity constraint hypothesis” and downward rigidity on wages and/or prices. The short run trade-off between inflation changes and the unemployment gap is modeled in a state-space framework that allows for time variation in both the NAIRU and the trade-off parameter. Empirical evidence for the US using the Kalman filter favors...

This paper uncovers the Phillips curve trade-off perceived by U.S. monetary policymakers. For that purpose we use data on individual forecasts for unemployment and inflation submitted by each individual FOMC member, which was recently made available for the period 19921998. The results point to significant changes in the perceived trade-off over time with the Phillips curve flattening and the i...