Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/192607 
Year of Publication: 
2010
Series/Report no.: 
Discussion Papers No. 625
Publisher: 
Statistics Norway, Research Department, Oslo
Abstract: 
We derive aggregate supply (AS) relationships for an intermediate-run macro model.The wage-price spiral provides the conceptual framework for a synthesis of different contesting theoretical and empirical perspectives on the AS curve: the Phillips curve model (PCM) and the wage-price equilibrium correction model (WPECM). The generalized AS curve is grafted into a small macro model. We analyze stability conditions, steady states, and dynamic solutions, using a combination of algebra and simulations. The specification of the AS curve, as a PCM or a WPECM, is shown to be important for all aspects of the model's solution, but within each model also the detailed parameterization is of qualitative importance. For example, endogenous cyclical fuctuations are typical for both nominal and real variables, e.g. inflation and unemployment.
Subjects: 
AS-AD
cycles
dynamics
equilibrium correction
macroeconomics
nominal rigidity
Phillips curve
unemployment
wage-price spiral.
JEL: 
E24
E30
J50
Document Type: 
Working Paper

Files in This Item:
File
Size
955.95 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.