The New Palgrave Dictionary of Economics

2018 Edition
| Editors: Macmillan Publishers Ltd

Phillips Curve

  • Edmund S. Phelps
Reference work entry
DOI: https://doi.org/10.1057/978-1-349-95189-5_1366

Abstract

In 1957 A.W. Phillips argued that, other things equal, the rate at which the nominal wage level was changing was a decreasing function of the level of the unemployment rate. Further, the rate of unemployment required to keep the rate of wage inflation down to the normal level was certainly positive in the United Kingdom, the domain of Phillips’s data, had remained stable for nearly a century. Milton Friedman and Edmund Phelps criticized the concept of a stable Phillips curve for having treated wage-setters’ behaviour, which presumably involved their expectations of the general wage movement, as a mechanical toy.

Keywords

Aggregate demand Cost inflation Equilibrium price level Excess demand and supply Fellner, W. J. Fisher, I. Friedman, M. Hyperinflation Inflation Keynes, J. M. Labour supply Lipsey, R. G. Lucas, R. Monetary theory Muth, J. Natural rate of unemployment Nominal wages Phelps, E. S. Phillips curve Phillips, A. W. Political business cycles Rational expectations Samuelson, P. A. Sargent, T. Unemployment Wage inflation 

JEL Classifications

E1 
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Copyright information

© Macmillan Publishers Ltd. 2018

Authors and Affiliations

  • Edmund S. Phelps
    • 1
  1. 1.