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The long-run determinants of UK wages, 1860-2004

  • Castle, Jennifer L.
  • Hendry, David F.

As it is almost 50 years since the Phillips curve, we analyze an historical series on UK wages and their determinants [see Phillips, A.W.H., 1958. The relation between unemployment and the rate of change of money wage rates in the United Kingdom, 1861-1957. Economica, 25, 283-299]. Huge changes have occurred over this long-run, so congruence is hard to establish: real wages have risen more than 6 fold, and nominal 500 times; laws, technology, wealth distribution, and social structure are unrecognizably different from 1860. We investigate: wage rates and weekly earnings; real versus nominal wages; breaks over 1860-2004; non-linearities, including Phillips' non-linear response to unemployment; 'trade union power' and unemployment benefits; and measures of excess demand, where workers react more to inflation when it rises.

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Article provided by Elsevier in its journal Journal of Macroeconomics.

Volume (Year): 31 (2009)
Issue (Month): 1 (March)
Pages: 5-28

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Handle: RePEc:eee:jmacro:v:31:y:2009:i:1:p:5-28
Contact details of provider: Web page: http://www.elsevier.com/locate/inca/622617

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