Suchergebnisse

We present a dynamic model of real wages in the open economy that encapsulates the well‐known "competing claims model" or "incomplete competition model" of real wage determination. In general, the model determines the development of inflation, real wages and the real exchange rate for any given rate of unemployment. Inflation, rather than unemployment, is the "conflict solver" in the unrestricted model. However, a supply side determined equilibrium rate of unemployment is subsumed as a special case. A re‐appraisal of the empirical literature shows that there is little evidence in support of the "natural rate" restrictions.

Hysteresis is one of the main concepts used in Layard, Nickell and
Jackman′s book, Unemployment: Macroeconomic Performance and the
Labour Market. Attempts to clarify the concept of hysteresis, from
its formal representation to its empirical applications. Emphasizes the
idea that hysteresis refers back to a given set of formal properties,
independently of the phenomenologies within which it is liable to be
encountered. In economics, the fields concerned may indeed vary a lot
(labour market, foreign trade, etc.). By highlighting all the formal
properties of hysteresis, shows how the assimilation of phenomena
characterized by a zero eigenvalue for linear systems (or unit‐root
systems for discrete‐time processes) is wrong and, moreover, how the
imprecise use of the concepts can lead to the particular constraints
affecting unit‐root econometrics being overlooked.