Based on US state-level data for the period 1982-2016, two reduced-form versions of New Keynesian wage Phillips curves are examined. These based either sticky nominal wages or real-wage rigidity. The endogeneity unemployment is taken into account by instrumentation and use common correlated effects (CCE) mean group (MG) methods. This first time that this methodology has been applied in context....

This paper reports on an extensive Monte Carlo study of seven residual-based tests of the hypothesis of no cointegration. Critical values and the power of the tests under the alternative of fractional cointegration are simulated and compared. It turns out that the Phillips-Perron t-test when applied to regression residuals is more powerful than Geweke-Porter-Hudak tests and the Augmented Dickey...