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Reconciling the Wage Curve and the Phillips Curve

  • Víctor M. Montuenga-Gómez
  • José M. Ramos-Parreño

The wage curve is the negative relationship that links wage levels to the unemployment rate. It fits accurately with modern non-competitive labour-market models, but goes against a Phillips-curve modelling, because the latter ties wage growth to the unemployment rate. In this article, we present a comprehensive review of these non-competitive models, highlighting recent contributions that try to eliminate the possible 'gap' that exists between the concepts of the wage curve, on the one hand, and the Phillips curve, on the other. Copyright Blackwell Publishers Ltd, 2005.

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Article provided by Wiley Blackwell in its journal Journal of Economic Surveys.

Volume (Year): 19 (2005)
Issue (Month): 5 (December)
Pages: 735-765

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Handle: RePEc:bla:jecsur:v:19:y:2005:i:5:p:735-765
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