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Structural change in the US Phillips curve, 1948-2021: the role of power and institutions

Author

Listed:
  • Mark Setterfield

    (Department of Economics, New School for Social Research)

  • Robert A. Blecker

    (Department of Economics, American University)

Abstract

This paper provides an institutional-analytical account of changes in the structure of the US Phillips curve (PC) during the post-war period. It does so by restoring conflict and power to the forefront of macro theory and, in particular, the wage- and price-setting behaviour of workers and firms. The resulting account is consistent with the main stylized facts that characterize the evolution of the US PC since 1948: the disappearance and subsequent reappearance of a ‘standard’ PC (relating the level of the inflation rate, not the change in this rate, to the rate of unemployment); and the flattening of the PC since the 1990s.

Suggested Citation

  • Mark Setterfield & Robert A. Blecker, 2022. "Structural change in the US Phillips curve, 1948-2021: the role of power and institutions," Working Papers 2201, New School for Social Research, Department of Economics.
    • Handle: RePEc:new:wpaper:2201
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    References listed on IDEAS

    as
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    Cited by:

    1. Lilian N. Rolim & Carolina Troncoso Baltar & Gilberto Tadeu Lima, 2023. "Income distribution, productivity growth, and workers’ bargaining power in an agent-based macroeconomic model," Journal of Evolutionary Economics, Springer, vol. 33(2), pages 473-516, April.
    2. Mark Setterfield, 2023. "Inflation and distribution during the post-COVID recovery: a Kaleckian approach," Journal of Post Keynesian Economics, Taylor & Francis Journals, vol. 46(4), pages 587-611, October.
    3. Rolim, Lilian & Carvalho, Laura & Lang, Dany, 2024. "Monetary policy rules and the inequality-augmented Phillips curve," Economic Modelling, Elsevier, vol. 139(C).

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    More about this item

    Keywords

    Phillips Curve; inflation; unemployment; natural rate hypothesis; bargaining power; institutions;
    All these keywords.

    JEL classification:

    • E12 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Keynes; Keynesian; Post-Keynesian; Modern Monetary Theory
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • E25 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Aggregate Factor Income Distribution
    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • N12 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - U.S.; Canada: 1913-

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