Skip Navigation



Cambridge Journal of Economics Advance Access published online on June 17, 2008
Cambridge Journal of Economics, doi:10.1093/cje/ben018
This Article
Right arrow Full Text
Right arrow Full Text (PDF)
Right arrow All Versions of this Article:
33/1/95    most recent
ben018v1
Right arrow Alert me when this article is cited
Right arrow Alert me if a correction is posted
Services
Right arrow Email this article to a friend
Right arrow Alert me to new issues of the journal
Right arrow Add to My Personal Archive
Right arrow Download to citation manager
Right arrowRequest Permissions
Google Scholar
Right arrow Articles by Harck, S.
Right arrow Search for Related Content
Social Bookmarking
Add to CiteULike   Add to Connotea   Add to Del.icio.us  
What's this?

© The Author 2008. Published by Oxford University Press on behalf of the Cambridge Political Economy Society. All rights reserved.

A Phillips curve interpretation of error-correction models of the wage and price dynamics

Søren Harck*

* University of Aarhus, Denmark. I am indebted to two anonymous referees for valuable comments on previous drafts of this paper. Needless to say, I am solely responsible for any ambiguity, obscurity or even outright mistake that may remain

Address for correspondence: Aarhus School of Business, University of Aarhus, Department of Economics, Prismet, Silkeborgvej 27, 8000 Aarhus C, Denmark; email: soh{at}asb.dk

This paper presents a model of employment, distribution and inflation in which a modern error correction specification of the nominal wage and price dynamics (referring to claims on income by workers and firms) occupies a prominent role. It is brought out, explicitly, how this rather typical error-correction setting, which actually seems to capture the wage and price dynamics of many large-scale econometric models quite well, is fully compatible with the notion of an old-fashioned Phillips curve with finite slope. It is shown how the steady-state impact of various shocks to the model can be profitably conceived of and interpreted in terms of (and to some extent even calculated by means of) this long-run Phillips curve.

Key Words: Employment • Wage share • Inflation • Phillips curve • Error correction

JEL classifications:: E12, E24, E25, E31

Manuscript received September 25, 2006; final version received February 4, 2008.


Add to CiteULike CiteULike   Add to Connotea Connotea   Add to Del.icio.us Del.icio.us    What's this?




Disclaimer: Please note that abstracts for content published before 1996 were created through digital scanning and may therefore not exactly replicate the text of the original print issues. All efforts have been made to ensure accuracy, but the Publisher will not be held responsible for any remaining inaccuracies. If you require any further clarification, please contact our Customer Services Department.