The Micro Theory of the Phillips Curve Reconsidered: A Reply to Holmes and Smyth.

In this article, the author replies to comments made on the development of satisfactory micro underpinnings of the Phillips curve by J.M. Holmes and D.J. Smyth. The notion that every set of disequilibrium transactions must be determined by an intersection of demand and supply curves is contrary to t...

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Publicado en:Economica Vol. 41; no. 161; pp. 62 - 71
Autor principal: Lipsey, Richard G.
Formato: Artículo
Publicado: Wiley-Blackwell Feb74
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Acceso en línea:Ver este registro en EBSCOhost
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        atl: The Micro Theory of the Phillips Curve Reconsidered: A Reply to Holmes and Smyth.
      aug:
        au: Lipsey, Richard G.
        affil: Queen's University, Kingston, Ontario.
      su:
        Phillips curve
        Economics
        Demand function
        Lorenz curve
        Econometric models
        Supply & demand
      sug:
        subj:
          Phillips curve
          Economics
          Demand function
          Lorenz curve
          Econometric models
          Supply & demand
      ab: In this article, the author replies to comments made on the development of satisfactory micro underpinnings of the Phillips curve by J.M. Holmes and D.J. Smyth. The notion that every set of disequilibrium transactions must be determined by an intersection of demand and supply curves is contrary to the whole spirit of Phillips' dynamics where transactions occur out of equilibrium because price does not adjust instantaneously. On none of the four interpretations offered above does there seem to be any justification of Holmes and Smyth's charge that the general type of micro-underpinning that I originally suggested is theoretically invalid, or that present-day students of the subject should abandon their attempts to develop in more detail a micro-model of disequilibrium wage and price behavior that will rationalize the Phillips curve. In any case, there can be no doubt that models exist that are not wildly unorthodox and from which a unique relation between unemployment and excess demand and between unemployment and the rate of change of money wages can be derived.
      pubtype: Academic Journal
      doctype: Article
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    language: English
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          year: 1974
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