Production Technologies and the Phillips Curve

Chichilnisky, G. & Heal, G. (1983). Production Technologies and the Phillips Curve. IIASA Collaborative Paper. IIASA, Laxenburg, Austria: CP-83-042

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In an economy with increasing returns to scale in production, wage changes and unemployment levels are shown to fluctuate systematically. Such fluctuations are part of the stable long-run configuration of the economy. They generate data sets in which wage changes show a negative Phillips-type correlation with the level of unemployment. This negative correlation is a reflection of the conventional Walrasian price adjustment process in the labor market, and does not imply that across equilibria there is a negative relation between wage changes and unemployment. In particular, it does not imply the existence of a trade-off between inflation and unemployment.

Item Type: Monograph (IIASA Collaborative Paper)
Research Programs: Industrial Metabolism (IND)
Depositing User: IIASA Import
Date Deposited: 15 Jan 2016 01:53
Last Modified: 27 Aug 2021 17:11

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