Unemployment, Disequilibrium and the Short Run Phillips Curve: An Econometric Approach
The paper specifies a disequilibrium model for the aggregate labor market consisting of demand and supply functions for labor, an adjustment equation for wages as well as for prices, a transactions equation and, finally, an equation that relates measured unemployment to vacancies and to excess demand. The model has a more sophisticated treatment of dynamics than earlier disequilibrium models, and uses measured unemployment as an endogenous variable. Two of the error terms are assumed to be serially correlated and the coefficients are estimated by maximum likelihood. The parameter estimates and the goodness-of-fit are satisfactory and the model's implications for the behavior of several important variables are sensible. Excess demand estimates computed in various ways are reasonable. The model is used to estimate the natural rate of unemployment as well as a short run Phillips curve. Finally, the stability properties ofthe model are analyzed by considering the eigenvalues of the system; they are found to have moduli less than one.
(This abstract was borrowed from another version of this item.)
Volume (Year): 1 (1986)
Issue (Month): 3 (July)
|Contact details of provider:|| Web page: http://www.interscience.wiley.com/jpages/0883-7252/|
|Order Information:|| Web: http://www3.interscience.wiley.com/jcatalog/subscribe.jsp?issn=0883-7252 Email: |
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Laffont, Jean-Jacques & Monfort, Alain, 1979. "Disequilibrium econometrics in dynamic models," Journal of Econometrics, Elsevier, vol. 11(2-3), pages 353-361.
- Barro, Robert J & Sahasakul, Chaipat, 1983.
"Measuring the Average Marginal Tax Rate from the Individual Income Tax,"
The Journal of Business,
University of Chicago Press, vol. 56(4), pages 419-452, October.
- Robert J. Barro & Chaipat Sahasakul, 1983. "Measuring the Average Marginal Tax Rate from the Individual Income Tax," NBER Working Papers 1060, National Bureau of Economic Research, Inc.
- Barro, Robert J. & Sahasakul, Chaipat, 1983. "Measuring the Average Marginal Tax Rate from the Individual Income Tax," Scholarly Articles 3451293, Harvard University Department of Economics.
- Robert J. Barro & Chaipat Sahasakul, 1983. "Measuring the Average Marginal Tax Rate from the Individual Income Tax," University of Chicago - George G. Stigler Center for Study of Economy and State 26, Chicago - Center for Study of Economy and State.
- Stiglitz, Joseph E, 1985. "Equilibrium Wage Distribution," Economic Journal, Royal Economic Society, vol. 95(379), pages 595-618, September.
- Joseph E. Stiglitz, 1974. "Equilibrium Wage Distributions," Cowles Foundation Discussion Papers 375, Cowles Foundation for Research in Economics, Yale University.
- Joseph E. Stiglitz, 1984. "Equilibrium Wage Distributions," NBER Working Papers 1337, National Bureau of Economic Research, Inc.
- Joseph G. Altonji, 1982. "The Intertemporal Substitution Model of Labour Market Fluctuations: An Empirical Analysis," Review of Economic Studies, Oxford University Press, vol. 49(5), pages 783-824.
- Burkett, John P., 1981. "Marginal and conditional probabilities of excess demand," Economics Letters, Elsevier, vol. 8(2), pages 159-162.
- Sarantis, Nicholas C., 1981. "Employment, labor supply and real wages in market disequilibrium," Journal of Macroeconomics, Elsevier, vol. 3(3), pages 335-354.
- Vassilis A. Hajivassiliou, 1987. "An Aggregative Disequilibrium Model of the U.S. Labour Market," Cowles Foundation Discussion Papers 848, Cowles Foundation for Research in Economics, Yale University.
- Quandt, Richard E., 1981. "Autocorrelated errors in simple disequilibrium models," Economics Letters, Elsevier, vol. 7(1), pages 55-61.
- Lucas, Robert E, Jr & Rapping, Leonard A, 1969. "Real Wages, Employment, and Inflation," Journal of Political Economy, University of Chicago Press, vol. 77(5), pages 721-754, Sept./Oct. Full references (including those not matched with items on IDEAS)